Question

Explain why at your Bank the are quoting you Euros at 1.16-1.20, while at the Airport...

Explain why at your Bank the are quoting you Euros at 1.16-1.20, while at the Airport kiosk the quote is 1.15-1.21, and at your broker's automated screen it shows 1.1821-1.1822?

Homework Answers

Answer #1

The differences between the quotation of euros among the bank, airport kiosk and the broker's automated screen is the demand-supply economics and the margin or the charges respective institutions wish to charge by exchanging euros.

Banks and airport kiosks has the huge demand for exchange of currency as people wish to exchange currency either before-hand going to the airport ie from their bank OR they wish to have it exchanged at the airport only. So, these institutions buy/sell currency accordingly and keep the exchange rates in a range for a particular period (generally a day). On the other hand, the broker's automated screen might show the real time rates, if anyone wishes to trade in the currency.

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