A bank exchanging foreign currency makes its profit in what manner?
A. on the difference between the spot rate and the foreign rate
B. A bank is forbidden, by law, to charge a premium in foreign currency exchange.
C. on the present value of the forward rate discounted to the date an option is purchased
D. on the difference between the retail rate and the wholesale rate
Answer:D
A bank exchanging foreign currency makes its profit in what manner?
A. on the difference between the spot rate and the foreign rate B. A bank is forbidden, by law, to charge a premium in foreign currency exchange. C. on the present value of the forward rate discounted to the date an option is purchased D. on the difference between the retail rate and the wholesale rate