CFA Practice Question

There are 341 practice questions for this study session.

CFA Practice Question

Which of the following is false concerning foreign currency bid-ask spreads?
A. An anticipated change in interest rates is not likely to affect bid-ask spreads.
B. If a currency is heavily traded, spreads tend to be lower.
C. Longer-term contracts tend to have higher spreads.
Explanation: Foreign currency spreads vary according to market conditions, including supply and demand for the currency, information availability, expected changes in government policy or interest rates, whether the dealer has an excess supply of a currency, trading volume, and length of the foreign exchange contract.

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