Question

A dealer in British pounds who thinks that the pound is about to appreciate A. may want to lower his ask price while raising his bid. B. may want to widen his bid-ask spread by raising his ask price and lowering his bid. C. may want to lower both his bid price and his ask price D. may want to raise both his bid price and his ask price

Answer 1

Answer: C)

Explanation:

A dealer in British pounds is considering a person who is buying British pound( or any other currency) deposit in a bank that is located in Great Britain( or somewhere else, depending on currency).

If a dealer knows that the pound is about to appreciate it is good for him to lower his bid price and his ask price which are both considering share of stock. The bid price is referring to the price that someone who is buying is wanting to pay and the ask price is referring to selling price that someone will also want to take.