$(10+10+15+10)$ marks

$a.$ Differentiate between bid and ask price. How $do$ you find

the percentage $of$ spread?

$b.$ Assume that the British pound $is$ quoted $asGB\frac{P}{U}SD$

$\frac{1\mathrm{.}1164}{66.}If$ a client wish $to$ buy how much $itcost$ him $in$

USD. Similarly the client wish $to$ sell $100,000$ how much

will $he$ will RECEIVE $in$ USD.

$c.$ Using below diagram what will happen the demand for $US$

dollar corresponding $to$ the EURO $if$ there $an$ increase $in$

the following for $US.$

Inflation rates

Interest rate

expectation

Make sure that you use three diagrams $to$ show the impact using

appropriate labels.

$d.$ What $is$ the role $of$ central bank $in$ the Forex Market?

Assume that the value for SAR against EURO above $15\%$

band $of$ price movement. Current spot rate for $EU\frac{R}{S}AR$

$4\mathrm{.}00is.$ How can the Saudi Central bank lower the value $of$

SAR within upper bound? Show the effect using Demand

and supply for EUR against SAR.

$-\{$:$(1+r_2{)}^2=(1+r_1)(1+E_1{r}_2])+L{P}_2$

$(1+r_n{)}^n=(1+r_{n-1}{)}^{n-1*}(1+f_n)$