percentage spread on USD ?

Today’s spot NZD:USD ask exchange rate is 0.6010, and the bid is 0.6000. The percentage spread on the _ USD _ is:

A. 0.6600%.

B. 0.1664%.

c. 0.3593%.


I would say B - the spread on the USD, I think , should be in the form of the direct quote to the NZD. It is the New Zealander that is concerned with the price of the USD. Percentage should be as % of the Ask.

USD:NZD BID = 1/.6010

USD:NZD ASK = 1/.6

B = 1.6639

A = 1.6667

A - B / A

1.6667 - 1.6639 /(1.6667) = .0016639 = .1664%

Correct. The reason I posted this is because if you try to round this to any thing less than 4 decimal places, you’ll get a big difference. Point taken, don’t round with exchange rates! For example, 1.67-1.66/1.67 = 0.5988%.

Good point…I consistently notice that the # of decimal places does matter significantly on the exam. Would it be a good idea to increase it to 5 places in your calculator?

I use 6 places, but I tend to round anyway!