Question : In the foreign exchange market, the term "bid" refers to:
Option 1: The price at which a currency is sold
Option 2: The price at which a currency is bought
Option 3: The difference between buying and selling prices
Option 4: The rate at which interest is charged on a loan
Correct Answer:
The price at which a currency is bought
Solution : The correct answer is b) The price at which a currency is bought
In the foreign exchange market, the "bid" refers to the price at which a trader or market participant is willing to buy a particular currency. It represents the highest price that a buyer is willing to pay for the currency at a given moment. The bid price is typically displayed on the left side of a currency pair quote, with the corresponding "ask" or "offer" price on the right side. The bid and ask prices together create the bid-ask spread, which represents the difference between the buying and selling prices of a currency in the market.
