Question: give step by step solution for below 2 question with explanation also 1. A foreign exchange trader with a U.S. bank took a short position

give step by step solution for below 2 question with explanation also

1. A foreign exchange trader with a U.S. bank took a short position of 7,000,000 when the $/ exchange rate was 2.55. Subsequently, the exchange rate has changed to 1.61. Is this movement in the exchange rate good from the point of view of the position taken by the trader? By how much has the banks liability changed because of the change in the exchange rate?

give step by step solution for below 2 question with explanation also

2. Using the spot and outright forward quotes as follow, determine the corresponding bid-ask spreads in points.

Spot 1.4331-1.4336

One-Month 1.4332-1.4342

Three-Month 1.4348-1.4363

Six-Month 1.4388-1.5308

give step by step solution for below 2 question with explanation also

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