1. You are given the quote for the currency pair below: GBP/USD 1.27811/1.27831 a) Which currency...

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1. You are given the quote for the currency pair below: GBP/USD 1.27811/1.27831 a) Which currency is the base currency? GBP_ b) Which currency is the quote currency? c) Which one is the offer price? d) Which one is the bid price? e) Calculate the relative (%) bid -ask spread. Also express it in basis points. 00015646 f) State the reverse currency pair. Calculate the bid price for the reverse currency pair. Calculate the ask price for the reverse currency pair. USD 1.27831 1.27811 g) You have $1 million. Given the quote convert the $1 million into british pounds (£). h) You have £1 million. Given the quote convert the 1 million british pounds (£) into US$. 2. Assume the following information: Value of Canadian dollar in U.S. dollars (CADUSD) Value of New Zealand dollar in U.S. dollars (NZDUSD) Quoted Price $0.90 $0.30 On the basis of the above direct quotations, calculate the cross exchange rate CADNZD, that is, NZD per CAD. 3. Assume the following information: Beal Bank Yardley Bank Bid price of New Zealand dollar $0.401 Ask price of New Zealand dollar $0.404 $0.398 $0.400 Is there any way to buy, say, one NZD from one bank and simultaneously sell it to the other bank at a profit? How? Show your calculation. 1. You are given the quote for the currency pair below: GBP/USD 1.27811/1.27831 a) Which currency is the base currency? GBP_ b) Which currency is the quote currency? c) Which one is the offer price? d) Which one is the bid price? e) Calculate the relative (%) bid -ask spread. Also express it in basis points. 00015646 f) State the reverse currency pair. Calculate the bid price for the reverse currency pair. Calculate the ask price for the reverse currency pair. USD 1.27831 1.27811 g) You have $1 million. Given the quote convert the $1 million into british pounds (£). h) You have £1 million. Given the quote convert the 1 million british pounds (£) into US$. 2. Assume the following information: Value of Canadian dollar in U.S. dollars (CADUSD) Value of New Zealand dollar in U.S. dollars (NZDUSD) Quoted Price $0.90 $0.30 On the basis of the above direct quotations, calculate the cross exchange rate CADNZD, that is, NZD per CAD. 3. Assume the following information: Beal Bank Yardley Bank Bid price of New Zealand dollar $0.401 Ask price of New Zealand dollar $0.404 $0.398 $0.400 Is there any way to buy, say, one NZD from one bank and simultaneously sell it to the other bank at a profit? How? Show your calculation.

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Answer Here are the answers 1 a The base currency is GBP British Pound and the quote currency is USD US Dollar b The offer price is 127831 and the bid ... View the full answer