How to calculate profits and losses (MODUL 4-12)

The correct answer is B.

In this case, the speculator needs to buy Swiss Francs and sell US Dollars. That eliminates C and D as possible answers. In order to identify the correct answer, it is helpful to review the concept of the bid/ask spread. When you sell dollars to a dealer, the dealer wants to buy the currency at the bid price. In this case, when you sell dollars to the dealer, you will receive only 1.2584 Swiss francs for every dollar you sell.