Question

Which of the following is NOT a possible bid/ask quotation for the Barbados dollar?

1) .50/.51
2) .49/.50
3) .52/.51
4) .51/.52
5) All of these are possible bid/ask quotations.

Answer 1

Option 3) .52/.51 is not a possible bid/ask quotation for the Barbados dollar because the bid price is higher than the ask price, which is not a valid scenario in foreign exchange markets.

Step-by-step explanation:

The question pertains to bid/ask quotations in the context of foreign exchange markets. The correct answer to the question “Which of the following is NOT a possible bid/ask quotation for the Barbados dollar?” is option 3) .52/.51 because in a valid foreign exchange quote, the bid price should always be lower than the ask price. This is because the bid price represents the price at which the dealer is willing to buy the currency and the ask price represents the price at which they are willing to sell. The other options presented are valid because the bid prices are lower than the ask prices.