Question

3. Given the bid-ask quotes for jpy/gbp 220-240, at what rate will:
(a) Mr. Agbo purchase gbp? 2 MARKS
(b) Mr. Agbo sell gbp? 2 MARKS
(c) Mr. Debrah purchase jpy? 2 MARKS
(d) Mr. Kwaku sell jpy? 2 MARKS

Answer 1

The bid price represents the maximum price that a buyer is willing to pay for a share of stock or other security. The ask price represents the minimum price that a seller is willing to take for that same security. A trade or transaction occurs after the buyer and seller agree on a price for the security which is no higher than the bid and no lower than the ask.

(a) Mr. Agbo purchase gbp?

Ans: Yes

(b) Mr. Agbo sell gbp?

Ans: No

(c) Mr. Debrah purchase jpy?

Ans: Yes

(d) Mr. Kwaku sell jpy?

Ans: No.