Buying the base currency at the bank ask
A simplified foreign-exchange exercise quotes EUR/USD at 1.1000 bid and 1.1002 ask from the bank perspective. A customer buys two million euros from the bank for the agreed value date. There are no fees, taxes, additional margins or settlement adjustments in this classroom model. One operator uses the bid because the customer is buying, while another first identifies which currency the quoting bank sells. The deal record separately lists the agreed euro amount, dollar payment and settlement instructions. Students must calculate the stated dollar amount and explain the transaction direction. The exercise does not supply a current market price, contractual spread entitlement or permission to substitute a fresh quote for an already agreed trade.
1. Which side applies and what is the dollar amount?
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The bank sells euros, the base currency, at its ask of 1.1002 dollars per euro. The customer pays 2,000,000 times 1.1002 = 2,200,400 dollars in the supplied no-fee model.
2. What should be confirmed operationally?
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Compare the agreed direction, amounts, rate, value date and authorized settlement details with the record and confirmation. The arithmetic alone does not verify all settlement instructions.