A dealer based in New York City provides a spot exchange rate quote of 18.8590 MXN/USD to

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A dealer based in New York City provides a spot exchange rate quote of 18.8590 MXN/USD to a client in Mexico City. The inverse of 18.8590 is 0.0530.

1. From the perspective of the Mexican client, the most accurate statement is that the:

A. direct exchange rate quotation is equal to 0.0530.

B. direct exchange rate quotation is equal to 18.8590.

C. indirect exchange rate quotation is equal to 18.8590.

2. If the bid/offer quote from the dealer was 18.8580–18.8600 MXN/USD, then the bid/offer quote in USD/MXN terms would be closest to:

A. 0.05302–0.05303.

B. 0.05303–0.05302.

C. 0.053025–0.053025.

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2024 CFA Program Curriculum Level I Volume 1

ISBN: 9781953337672

1st Edition

Authors: CFA Institute

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Question Posted: Feb 01, 2024 08:02 AM

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A dealer based in New York City provides a spot exchange rate quote of 18.8590 MXN/USD to

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1 B is correct A direct exchange rate uses the domestic currency as the price currency and the forei...View the full answer

2024 CFA Program Curriculum Level I Volume 1

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