Question: 1. Based on the exchange rates below, please answer the following questions: Bid Ask Dollar/Pound $1.25/pound $1.60/pound Dollar/Yen $0.008/yen $0.010/yen A. Calculate the implied bid

1. Based on the exchange rates below, please answer the following questions:

Bid Ask
Dollar/Pound $1.25/pound $1.60/pound
Dollar/Yen $0.008/yen $0.010/yen

A. Calculate the implied bid and ask rates for pound/yen (the amount of pound per yen)

B. If you start with 100 pounds, you sell them for dollars, and then sell the dollars for Yen, how much Yen would you have at the end?

C. If you start with 100,000 yen, you sell them for dollars, and then sell the dollars for pounds, how many pounds would you have at the end?

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