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Answer true/false and explain why: (1) A bank quotes the following rates for euro and U.S....

Answer true/false and explain why:

(1) A bank quotes the following rates for euro and U.S. dollar: $1.1840-60/€. Then the ask price of the dollar is $1.1860.

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Answer #1

Answer: True.

Ask price is $1.1860/€.

Bid price- This is the selling price of a security. It is usually lower than the Ask price. It is the price, that buyers are willing to pay.

Ask price- This is the buying price of a security. It is usually higher than the Bid price. It is the price, that sellers are willing to take.

Difference between Bid and Ask price is the "Spread".

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