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Dear Lecturer,
I would like to ask you a question related to foreign currency management. When dealing with the exercise related to the foreign currency management, when should I use the bid rate or ask rate?
Could you please tell me the differences between these two rates and when could we use these two rates at the right time in the exercise?
I look forward to hearing from you.
Thank you.
Best regards,
Although the previous examiner used the terms bid and ask, the current examiner tend not to.
However the bid rate is the rate for selling the other currency, and the ask rate is the rate for buying the other currency.
As to which to use, watch the first of my free lectures on foreign exchange risk management where is spend time explaining which rate to use, and why.
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