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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Forex Spread problem
Q 46 Nedwen
Spot rate and forward rates are given…with + margins they are assumed “Bid’
Q 48 Omani Inc.
In the same way Spot and forward rates are mentioned and this is assumed to be “Offer”.
So, how to distinguish which price is given if there is only one price mentioned in the question.
As far as concern of the fact that “the bank never loses”, can be obtained by adding and substracting + the margin into it.
But how to know whether it is Bid/Offer first of all.
If there is only one rate given in a question (i.e. no spread) then you use the same rate whichever way you are converting (i.e. the same rate for bid and for offer).