Question #34
Reading: Reading 5 Currency Exchange Rates - Understanding Equilibrium Value
PDF File: Reading 5 Currency Exchange Rates - Understanding Equilibrium Value.pdf
Page: 14
Status: Unattempted
Correct Answer: B
Question
Which of the following statements about foreign currency bid-ask spreads is least accurate? Foreign currency bid-ask spreads:
Answer Choices:
A. are influenced by time window in a trading day
B. increase as the size of the transaction decreases
C. are a function of transaction volume and volatility
Explanation
Bid-ask spreads are size related in that the larger the transaction the larger the spread.