A bank is quoting the following exchange rates against the dollar for the Swiss franc and the
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Question:
A bank is quoting the following exchange rates against the dollar for the Swiss franc and the Australian dollar:
USD:CHF = 1,6930 – 90
USD:ASD = 1,9026 – 40
An Australian firm asks the bank for a ASD:CHF quote.
- What would the ASD:CHF bid price represent?
(1 marks)
- What would the ASD:CHF ask price represent?
(1 marks)
- “The Bid - Ask spread in each step in the calculation of the cross rate is expected to be favour of the bank”. Is this statement true or false? Explain.
(2 marks)
- Describe 5 factors that would dictate the size of Bid-Ask spread and explain how they affect the
Related Book For
International Financial Management
ISBN: 978-0078034657
6th Edition
Authors: Cheol S. Eun, Bruce G.Resnick
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