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Basic Question 11 of 12
A bank/dealer with a shortage of a currency and a customer that needs the currency to pay an accounts payable might be tempted to ______
B. raise its bid price.
C. lower its ask price.
A. lower its bid price.
B. raise its bid price.
C. lower its ask price.
User Contributed Comments 5
| User | Comment |
|---|---|
| vatsal92 | This question needs to be answered from Bank's point of view. |
| ars2011 | The Dealer buys at lower price sells at a higher price.Since now he needs currency he will offer better terms to the client i.e raise his bid to entice him |
| Inaganti6 | supply chain deficit leads to increased willingness to procure fx at higher price for resale... |
| jejemike | The dealer is at an advantage because he has a base currency that is in short supply but highly demanded for. The bid price, which is the price at which he will buy the price currency from the customer will rise |
| jzty | This question should be answer from both perspectives. Both the bank and the customer are in need of the currency. So they need to pay more for what they want. |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
describe the foreign exchange market, including its functions and participants, distinguish between nominal and real exchange rates, and calculate and interpret the percentage change in a currency relative to another currency
CFA® 2025 Level I Curriculum, Volume 1, Module 7.