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Basic Question 7 of 19

Other things being equal, which currency pair should have the tightest bid-ask spread? USD: U.S. dollar. MXN: Mexican Peso. CHF: Swiss Franc. AUD: Australian Dollar. EUR: Euro.

A. MXN/CHF.
B. USD/EUR.
C. EUR/AUD.
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User Contributed Comments 1

User Comment
jejemike a currency pair whose component are actively traded will have the smallest spread
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I used your notes and passed ... highly recommended!
Lauren

Lauren

Learning Outcome Statements

calculate and interpret the bid-ask spread on a spot or forward foreign currency quotation and describe the factors that affect the bid-offer spread;

identify a triangular arbitrage opportunity and calculate its profit, given the bid-offer quotations for three currencies;

CFA® 2025 Level II Curriculum, Volume 1, Module 8.