Ask Rate

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Ask Rate

The lowest exchange rate at which a seller is willing to sell a currency. See also: Ask.
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We only consider the first type of transaction cost for our study, as all involved data series and models are described in bid and ask form and all conditions are calculated by using both bid and ask rates.
On the other hand, domestic interest rates are quoted as [r.sub.b] for the bid rate and [r.sub.a] for the ask rate, the corresponding foreign interest rates are bid rate [r.sub.a.sup.*] and ask rate [r.sub.a.sup.*], at which credit market participants can lend and borrow, respectively.
According to Equation 1, [F.sub.a] < [S.sub.b] (1+ rb) (1+[r.sub.*.sup.a])-1, for the occurrence of a pure arbitrage condition, the domestic forward ask exchange rate [F.sub.a] and the foreign interest ask rate [r.sub.a.sup.*] are expected to drop, while the domestic spot bid rate [S.sub.b] and domestic interest bid rate [r.sub.b] are expected to rise.
The estimated parameter of domestic forward ask exchange rate [F.sub.a] is negative, indicating that the decrease of domestic forward ask rate leads to the occurrence of pure arbitrage conditions.
According to the second pure arbitrage condition, [F.sub.b] > [S.sub.a] (1+[r.sub.a]) [(1+[r.sup.*.sub.b]).sup.- 1], if the pure arbitrage condition occurs, the domestic forward bid exchange rate [F.sub.b] and the foreign interest bid rate [r.sub.b.sup.*] shall rise increase, whereas the domestic spot ask rate Sa and the domestic interest ask rate [r.sub.a] shall fall.
US dollar" transactions, reported in the second and third column of Table V (AUS-US), show that when the first pure arbitrage conditions occur, domestic spot bid rate [S.sub.b] becomes the most dominant (with 41.29% contribution in driving force), followed by domestic forward ask rate [F.sub.a] (with 36.13% contribution).
The rates in our sample are middle rates, i.e., averages of bid and ask rates.
Part B of Table 2 shows summary statistics describing the spread between swap bid and ask rates. Spreads are low in that they vary between 7.25 and 7.89 basis points.
As described in Section IV, our empirical analysis of default risk in the yen-dollar swap market involves comparing bid and ask rates for swaps to the yields of equal maturity bonds.
Analysis of variation in swap mid-rates shows that the yen-dollar currency swap market is highly liquid and active because spreads over mid-rates are low and the spread between the bid and ask rates is low.
0.21 0.38 0.51 0.73 0.86 t-statistics 17.37 18.33 18.86 18.40 18.51 Hotellin.'s 407.59 [T.sup.2] Part B: Spread between bid and ask rates Mean 7.39 7.28 7.25 7.38 7.54 7.89 Std.
A spread for a particular maturity is the difference between the bid or ask rate and the quoted mid-rate.