The difference between bid and ask prices of a currency,or the fee earned by the bank is called the _____.

Question

Quizplus · Accepted Answer

The bid-ask spread represents the difference between the bid price (price at which a buyer is willing to buy a particular currency) and the ask price (price at which a seller is willing to sell a particular currency), which is essentially the fee earned by the bank or financial institution facilitating the transaction. The exchange rate represents the rate at which one currency can be exchanged for another, while the forward rate represents the expected future exchange rate. Premium and hedge are not relevant in this context.

The Difference Between Bid and Ask Prices of a Currency,or