Q6. An indirect quote for pesos to a $U.S. investor is 8.00-8.50. If you have $100, how many pesos will you be able to buy?

A)   11.8.

B)   850.

C)   800.

Q7. $0.555/GBP is:

A)     a direct quote in Great Britain.

B)     an indirect quote in Great Britain.

C)     an indirect quote in the U.S.

Q8. If the bid is $1.8709/GBP and the ask is $1.8841/GBP, what is the bid−ask spread in GBP/USD?

A)     0.5345 − 0.5407.

B)     1.8841 − 1.8709.

C)     0.5308 − 0.5345.

答案和详解如下：

Q6. An indirect quote for pesos to a $U.S. investor is 8.00-8.50. If you have $100, how many pesos will you be able to buy?

A)   11.8.

B)   850.

C)   800.

Correct answer is C)

Use the following steps to calculate this result:

Step 1: Put the quote in direct terms. (Remember: The bid will become the ask and the ask will become the bid).

Bid: 1.00000 / 8.50000_peso/$ = 0.11765_$/peso

Ask: 1.00000 / 8.00000_peso/$ = 0.12500_$/peso

Step 2: Calculate how many pesos can be purchased for $100.00

Since we are buying pesos, we have to buy at the ask price of 0.12500_$/peso. 100.00000_$ / 0.12500_$/peso = 800_pesos.

Alternate method:

For the examination, remember that the bank must make its profit through the bid-ask spread (the foreign-exchange market is typically transaction-fee free), so you will always buy at the "high" price and sell at the "low price." Here, the "high" price is 8.00000_peso/$ (At 8.00000_peso/$ the peso is worth more than at 8.50000_peso/$).

100.00000_$ × 8.00000_peso/$ = 800.00000_peso

Q7. $0.555/GBP is:

A)     a direct quote in Great Britain.

B)     an indirect quote in Great Britain.

C)     an indirect quote in the U.S.

Correct answer is B)

In country X, an indirect quote is foreign currency over domestic currency, or FC/DC_X.  The quote 0.55500_$/GBP is FC/DC (or indirect) to an investor in Great Britain and DC/FC (or direct) to an investor in the United States.

Q8. If the bid is $1.8709/GBP and the ask is $1.8841/GBP, what is the bid−ask spread in GBP/USD?

A)     0.5345 − 0.5407.

B)     1.8841 − 1.8709.

C)     0.5308 − 0.5345.

Correct answer is C)

The bid-ask spread in European terms is foreign currency per dollar (FC/$) so you are being asked to convert the bid−ask spread to GBP/$. To convert to GBP/$ just take the reciprocal of each number and reverse the bid−ask spread.

1 / ($1.8709/GBP) = 0.5345 GBP/$ and 1 / ($1.8841/GBP) = 0.53076 GBP/$. The bid−ask spread is now 0.5308 − 0.5345.