土豆妮

The Japanese yen is trading at 115.2200 ￥/$ and the Danish krone (DKK) is trading at 16.4989 ￥/DKK. The $/DKK exchange rate is:

A) 6.9835 $/DKK.

B) 0.1432 $/DKK.

C) 0.5260 $/DKK.

土豆妮

The Japanese yen is trading at 115.2200 ￥/$ and the Danish krone (DKK) is trading at 16.4989 ￥/DKK. The $/DKK exchange rate is:

A) 6.9835 $/DKK.

B) 0.1432 $/DKK.

C) 0.5260 $/DKK.

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The cross rate between $ and DKK is calculated in the following manner:

$/￥ × ￥/DKK = (1 / 115.2200) × 16.4989 = 0.1432 $/DKK (the Yen cancels out)

土豆妮

A Mexican dealer gives a quote of 8.00 bid / 8.10 ask (MXN/USD) and a London dealer quotes the U.S. dollar at 2.00 bid / 2.1 ask (GBP/USD). What is the MXN/GBP bid and ask from the perspective of a Mexican dealer?

A) 3.81 ? 4.05.

B) 3.81 ? 3.86.

C) 4.00 ? 4.05.

土豆妮

A Mexican dealer gives a quote of 8.00 bid / 8.10 ask (MXN/USD) and a London dealer quotes the U.S. dollar at 2.00 bid / 2.1 ask (GBP/USD). What is the MXN/GBP bid and ask from the perspective of a Mexican dealer?

A) 3.81 ? 4.05.

B) 3.81 ? 3.86.

C) 4.00 ? 4.05.

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This result is determined as follows:

Step 1: Invert GBP quote.

First, we need to invert the GBP quotes to make the currency units USD/GBP. Then, when we multiply by the MXN/USD quote we will have the correct MXN/GBP units. (Remember that when you take the reciprocal of a quote, the bid becomes the ask and vice versa. So, for the bid we take the given ask)

Bid: 1.00000 / 2.10000_GBP/USD = 0.47619_USD/GBP

Ask: 1.00000 / 2.00000_GBP/USD = 0.50000_USD/GBP

Step 2: Calculate MXN/GBP bid-ask Prices.

Bid: 8.00000_MXN/USD × 0.47619_USD/GBP = 3.80952_MXN/GBP, or 3.81_MXN/GBP.

Ask: 8.10000_MXN/USD × 0.50000_USD/GBP = 4.05000_MXN/GBP, or 4.05_MXN/GBP.

Thus, the MXN/GBP bid-ask is: 3.81_MXN/GBP - 4.05_MXN/GBP.

luqian55

thanks

annyyu

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