Currency forwards: Bid Ask or Mid Point?

CFA Level II Economics
#1

Hi all

I am confused. For taking an offsetting position for a currency forward, do we use the relevant bid or ask or use the mid point of the two? One of the examples in the curriculum is confusing?

#2

For taking an offsetting position we use the relevant bid or ask spread.The mid point is taken when you want to roll over the position for few more months ie if you enter into a contract to buy dollars versus euro in 3 months and at 3 months u want your postion to be still open use mid points. Also mid points are used in UCP CIP for finding the appropriate forward discount/premium.

#3

So the words rolling over will be clearly mentioned in the question?

#4

Yes it will be.