土豆妮

If the spot exchange rate between the British pound and the U.S. dollar is 0.7775 ?/$, and the spot exchange rate between the Canadian dollar and the British pound is 1.8325 CAD/?, what is the U.S. dollar/Canadian dollar spot cross exchange rate?

A) 1.42477.

B) 0.70186.

C) 0.42428.

土豆妮

If the spot exchange rate between the British pound and the U.S. dollar is 0.7775 ?/$, and the spot exchange rate between the Canadian dollar and the British pound is 1.8325 CAD/?, what is the U.S. dollar/Canadian dollar spot cross exchange rate?

A) 1.42477.

B) 0.70186.

C) 0.42428.

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First, convert 0.7775 ?/$ to 1/0.7775 = 1.28617 $/?.

Then, divide 1.28617 $/? by 1.8325 CAD/? = 0.70187 $/CAD.

土豆妮

Given the following bid-ask spreads, calculate the SF/DKK bid ask spread:  

• SF/$ bid-ask 1.3096 ? 1.4528  
• DKK/$ bid-ask 2.4365 ? 2.5843

A) 1.6771 ? 1.9733.

B) 0.53749 ? 0.56216.

C) 0.50675 ? 0.59627.

土豆妮

An analyst observes that the exchange rate for Mexican pesos (MXN) is 8 per U.S. dollar (USD), and the exchange rate for Polish zlotys (PLN) is 6 per U.S. dollar. The MXN/PLN exchange rate is closest to:

A) 1.333.

B) 0.750.

C) 14.000.

土豆妮

An analyst observes that the exchange rate for Mexican pesos (MXN) is 8 per U.S. dollar (USD), and the exchange rate for Polish zlotys (PLN) is 6 per U.S. dollar. The MXN/PLN exchange rate is closest to:

A) 1.333.

B) 0.750.

C) 14.000.

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The cross rate of MXN/PLN is 8 MXN/USD / 6 PLN/USD = 1.333 MXN/PLN.

土豆妮

The current spot rates for currency exchange are as follows: Thai Baht to $ of 0.02240 THB/$ and Australian Dollar (AUD) to Thai Baht of 23.89923 AUD/THB. What is the $/AUD spot cross exchange rate?

A) 0.00094.

B) 0.53534.

C) 1.86796.

土豆妮

The current spot rates for currency exchange are as follows: Thai Baht to $ of 0.02240 THB/$ and Australian Dollar (AUD) to Thai Baht of 23.89923 AUD/THB. What is the $/AUD spot cross exchange rate?

A) 0.00094.

B) 0.53534.

C) 1.86796.

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

Step 1:  Multiply the two quotes together (THB will cancel out) to obtain AUD/$: 0.02240 THB/$ * 23.89923 AUD/THB = 0.53534 AUD/$.

Step 2: Take the reciprocal of this result to obtain $/AUD: 1 / 0.53534 AUD/$ = 1.86796 $/AUD

An alternative calculation method is as follows:

Step 1: Take the reciprocal of the THB/$ quote:  1 / 0.02240 THB/$ = 44.64286 $/THB

Step 2: Divide this result by the AUD/THB quote:   44.64286 $/THB / 23.89923 AUD/THB = 1.86796 $/AUD

土豆妮

Given the following quotes: 2.00 GBP/USD and 8.00 Pesos/USD, calculate the direct Pesos/GBP spot cross exchange rate.

A) 0.625.

B) 0.250.

C) 4.000.

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The direct method of quoting currencies is domestic currency / foreign currency or GBP/Pesos. You need to calculate what one peso is worth in pounds, 8 / 2 = 4.

土豆妮

A bank in Canada is quoting CAD/USD bid 1.4950 ? ask 1.5005, and USD/EUR bid 0.9350 ? ask 0.9400. What is exchange rate bid and ask for CAD/EUR?

A) CAD/EUR bid 1.3978 ? ask 1.4105.

B) CAD/EUR bid 1.5904 ? ask 1.6048.

C) CAD/EUR bid 0.6254 ? ask 0.6264.

土豆妮

A bank in Canada is quoting CAD/USD bid 1.4950 ? ask 1.5005, and USD/EUR bid 0.9350 ? ask 0.9400. What is exchange rate bid and ask for CAD/EUR?

A) CAD/EUR bid 1.3978 ? ask 1.4105.

B) CAD/EUR bid 1.5904 ? ask 1.6048.

C) CAD/EUR bid 0.6254 ? ask 0.6264.

First invert the USD/EUR quote by 1 / 0.9350 = 1.0695 and 1 / 0.9400 = 1.0638 for a EUR/USD bid-ask spread of 1.0638 ? 1.0695 EUR/USD. Then set up a bid-ask matrix.

1.4950 / 1.0695 = 1.3978 CAD/EUR

1.5005 / 1.0638 = 1.4105 CAD/EUR

The CAD/EUR bid-ask spread is 1.3978 ? 1.4105