The price for French francs is $0.1945-67. What is the percent spread for this currency?
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A. B. C. D. E.Explanation
The percent spread is the (ask price - bid price)/ask price times 100. In this case, (0.1967 - 0.1945)/0.1967 x 100 = 1.12%
To calculate the percent spread for a currency, we need to determine the difference between the buying (higher) price and the selling (lower) price, and then express that difference as a percentage of the selling price.
In this case, the buying price for French francs is $0.1945, and the selling price is $0.1967.
Step 1: Calculate the difference between the buying and selling prices: Difference = Buying price - Selling price Difference = $0.1945 - $0.1967 Difference = -$0.0022
Step 2: Express the difference as a percentage of the selling price: Spread percentage = (Difference / Selling price) * 100 Spread percentage = (-$0.0022 / $0.1967) * 100 Spread percentage ≈ -1.1186%
Note: The spread percentage is negative because the selling price is higher than the buying price. However, since negative spreads are uncommon in practice, we consider the absolute value of the percentage.
Therefore, the percent spread for the French francs is approximately 1.12%.
The correct answer is B. 1.12%.