1 Suppose that the current exchange rate is 0 80 $1 00 The direct quote, from the U S perspective is 2 Suppose that the current exchange rate is 1 00 $1 60 The indirect quote, from the U S perspective is 3 The AUD $ spot exchange rate is AUD1 60 $ and the SF $ is SF1 25 $ The AUD SF cross exchange rate is 4 The euro yen cross exchange rate can be computed as (choose the correct answer(s)) it says choose the correct answer(s) So, there may be more than 1 correct answer S( Y) S ($ Y) S ( $) S( Y) S($ Y) S($ ) S( Y) S( $) S(Y $) 5 Suppose a bank customer with 1,000,000 wishes to trade out of euro and into Japanese yen The dollar euro exchange rate is quoted as $1 60 1 00 and the dollar yen exchange rate is quoted at $1 00 Y120 How many yen will the customer get There are two ways to solve it You can either convert 1 mil euros to dollar (1 euro 1 6 dollars) first and then convert those dollars to yen ($1 Y120) The second way is finding the Y Euro rate (find that cross rate) and then multiply it by 1 mil

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Question: 1. Suppose that the current exchange rate is 0.80 = $1.00. The direct quote, from the U.S. perspective is .. 2. Suppose that the current

1. Suppose that the current exchange rate is 0.80 = $1.00. The direct quote, from the U.S. perspective is ..

2. Suppose that the current exchange rate is 1.00 = $1.60. The indirect quote, from the U.S. perspective is:

3. The AUD/$ spot exchange rate is AUD1.60/$ and the SF/$ is SF1.25/$. The AUD/SF cross exchange rate is:

4. The euro-yen cross exchange rate can be computed as: (choose the correct answer(s)) ***it says choose the correct answer(s). So, there may be more than 1 correct answer.***

S(/Y) = S($/Y) S(/$)
S(/Y) = S($/Y) / S($/)
S(/Y) = S(/$) / S(Y/$)

5. Suppose a bank customer with 1,000,000 wishes to trade out of euro and into Japanese yen. The dollar-euro exchange rate is quoted as $1.60 = 1.00 and the dollar-yen exchange rate is quoted at $1.00 = Y120. How many yen will the customer get? **There are two ways to solve it. You can either convert 1 mil euros to dollar (1 euro = 1.6 dollars) first and then convert those dollars to yen ($1=Y120). The second way is finding the Y/Euro rate (find that cross rate) and then multiply it by 1 mil.**

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