Calculate the possible rate for buying GBP

Q: The following are the prices in the foreign exchange market between the U.S. dollar and another…

A: Given: Spot rate =$0.03112/LC3 month forward =$0.03117/LC

Q: The exchange rate between the British pound and the Australian dollar (GBP/AUD) is 0.4220, it means…

A: Exchange rate between the British pound and the Australian dollar (GBP/AUD) is 0.4220

Q: Suppose the Japanese yen exchange rate is ¥107 = $1 and the British pound exchange rate is £1 =…

A: Cross rate refers to the exchange rate of any two currencies whose quote is not published. A…

Q: The theory of purchasing power parity (PPP) states that in the long-run exchange rates between two…

A: Purchasing power parity" The purchasing power parity is a concept which is used for measurement of…

Q: In the spot market, P1 = 100 USD, 1 USD = 0.95 Yen, and 1 Yen = 5.50 British Pound. What is the…

A: The cross rate functions can be used to calculate the exchange rate of Peso and Pound

Q: A Big Mac costs SFr6.50 in Switzerland and US$5.74 in the United States. If current spot rate is…

A: An exchange rate is how much it costs to exchange one currency for another. Exchange rates fluctuate…

Q: Suppose the exchange rate between U.S. dollars and Swiss francs is SF 1.41 = $1.0o, and the exchange…

A: Exchange rate (ER) is a value at which 2 different currencies are exchanged or traded. ER is…

Q: Let the NZ$-Euro exchange rate be 0.60 (1 NZD buys 0.60 Euro). Let the NZ price level (P) be 40 and…

A: Real exchange rate or RER is that exchange rate which is inflation adjusted i.e. rate is adjusted…

Q: Suppose Dassie Bank quoted the exchange rate of Singapore dollar in US$ at $0.60, the pound rate in…

A: Foreign currency exchange rates are rates used for exchange of one currency into another currency.…

Q: Suppose Dassie Bank quoted the exchange rate of Singapore dollar in US$ at $0.60, the pound rate in…

A: Currency arbitrage is a strategy that is used by investors to exploit the differences in exchange…

Q: Assume that the current price of a Big Mac in the United States today is $5.75.  Assume also that…

A: Big Mac in the United States = $5.75 Big Mac in Peru =10.50 sol USDPEN exchange rate = 3.7400 sol…

Q: What impact do Exchange Rate changes have on the Balance of Trade? Calculate the following scenario…

A:

Q: Suppose you long one Australian dollar call and one Australian dollar put with an exercise exchange…

A: a). Computation of the net call pay, net put pay and net combined pay:- Given Information:- Call…

Q: An investor in the US can invest in the US, and earn an interest rate of 5.55%, or invest in Jápan…

A: Answer: Calculation of the value of the Et: Formula,  Forward rate = Spot rate x [(1+ Interest rate…

Q: If it takes 1.25 euros to buy 1 US dollar, the direct quote for the exchange rate in Europe is: A.…

A: direct quotes states what amount of domestic currency required to buy one unit of foreign currency.

Q: Aa An exchange rate is the price of one country's currency expressed in another country's currency.…

A: Exchage rate: The value of the currency of one country in the terms of the current of another…

Q: Suppose the exchange rate between the U.S. dollar and the Swedish krona was 9.1 krona = $1 and the…

A: given, 9.1 krona = $1 ( this is indirect quotation) 1 pound = $1.3 ( this is direct quotation)…

Q: Is there any violation of CIP? (b) Calculate the covered margin (going short on the AUD). (c)…

A: Here the spot rate is lower than the forward rate, so the EUR is selling at a premium.  The interest…

Q: Given the following exchange rates in the market, what should be the cross exchange rate between…

A: Cross exchange rate is the rate which is determined between two currencies. Both the currencies are…

Q: Suppose the average price of a Big Mac in the United States is $3.50 while in Japan the average…

A: As per purchasing power parity, the price of the goods is same at the respective exchange rates.…

Q: Calculate the possible rate for buying SGD (Singapore Dollar) in exchange for selling JPY as well as…

A: SGD buying rate against the JPY : Bid JPY/GBP = Bid JPY/USD / Ask USD / SGD SGD buying rate against…

Q: Suppose the Japanese yen exchange rate is ¥109 = $1 and the British pound exchange rate is £1 =…

A: In finance, a currency exchange rate represents the value of one country's currency against per unit…

Q: Suppose the Singapore dollar is worth A$1.03 and the Malaysian ringgit is worth A$0.33. (a) Define a…

A: A currency exchange rate is a financial rate at which the currency of one country can be exchanged…

Q: On January 31, 2019 the exchange rate between the US dollar and the euro was 1.14 USD/EUR. At the…

A: Purchasing power parity is the metric that measures the absolute purchasing power of various…

Q: Suppose the exchange rate between the U.S. dollar and the EMU euro is€0.80 = $1.00 and the exchange…

A: A cross rate is the money exchange rate between 2 currencies if the nation where the exchange rate…

Q: A currency trader observes that in the spot exchange market, 1 U.S.dollar can be exchanged for 3.58…

A: The requirement is to calculate the cross exchange rate between the two currencies. To calculate the…

Q: If there is, what would be the profit of the mispricing?

A: Information Provided: Japanese yen exchange rate is ¥122 = $1 British pound exchange rate is £1 =…

Q: ange rates between the USD and CAD, AUD, and BRL respectively are 1.20, 0.90, and 1.40 respectively…

A: Real effective exchange rate is based on the overall exchange rate based on trade between the…

Q: The exchange rates in New York for $1 are Can$1.0941 or 0.7257 pounds. In Toronto, Can$1 will buy…

A: Arbitrage is practice of immediate buying and selling of assets including equities, bonds,…

Q: Assume that 1 U.S. dollar can be exchanged for 105 Japanese yen or for 0.80 euro.What is the…

A: Exchange rate the rate at which currency of one country can be exchanged for other currency. These…

Q: rates and prices today: the spot exchange rate today: AU$2.05 per U.K pound; the price level in…

A: According to purchase power parity the prices in two countries must be in equilibrium with exchange…

Q: Assume that the indirect quote is for 115 Japanese yen per U.S.dollar and that the direct quote is…

A: Computation of Exchange rate of 1Euro is equal to how many yen: The exchange rate is given: 1US$=115…

Q: An exchange rate is the price of one country's currency expressed in another country's currency. The…

A: The exchange rates are stated as “Direct Quotation”.Justification: A direct quotation is the…

Q: Assume you are an exporter and you want to sell USD that you have received as export remittance. The…

A: Answer: The selling rate of 1 USD is INR 1/65.12

Q: If the direct exchange rate of the euro is worth $0.685, what is indirect rate of the euro?note…

A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…

Q: In the spot market, P1 = 100 USD, 1 USD = 0.95 Yen, and 1 Yen = 5.50 British Pound.  What is the…

A: Cross exchange rate method is used when there is no direct quotation of currencies. Thereafter, with…

Q: Assume Singapore dollars (SGD) is worth RM3.1422 and the Great Britain pound (GBP) is worth…

A: A cross rate is a foreign exchange rate between three currencies being converted into two…

Q: Today you notice the following exchange rate quotation: $1 = 3 Argentine pesos 1 Argentine pesos =…

A: The cross exchange rates can be used to determine the amount of in currency in terms of another.

Q: You checked with the foreign exchange dealer and find out that rate for Kuwaiti Dinar for 180 days…

A: In exchange of currency there are available future contracts to hedge the current position.

Q: Suppose the exchange rate between the U.S. dollar and the Swedish krona was 9.0 krona = $1, and the…

A: Given, $1 = 9.0 krona Pound 1 = 1.40$

Q: If today 1 US Dollar can buy 3 Korean Won and 1 Korean Won can buy equals 2 Philippine Peso, what is…

A: Exchange rate (ER) is a value at which two or more currencies are exchanged or traded. To make the…

Q: Suppose that the following exchange rates are current: 1 US$ = 61.42 Indian Rupees, 1 Japanese Yen =…

A: Point Currency Rate Currency Equals Rate Currency A ₹/$ 1 $ = 61.42 ₹ B ₹/¥ 1 ¥ = 0.57 ₹ C ¥/$…

Q: If today 1 US Dollar can buy 3 Korean Won and 1 Korean Won can buy equals 2 Philippine Peso, what is…

A: Cross exchange rate is used when there is no direct quotation available between two currencies.…

Q: d) You observe the following exchange rates in the market.i) $1 = 0.85 euros and 1 krona = $ 0.13.…

A: i)  Compute the cross exchange rate between euro and krona:

Q: You live in the United States and want to try to make some money through interest rate arbitrage…

A: Foreign Exchange Market is that under which we were trading in Foreign Currency we can make the…

Q: Suppose the exchange rate between the U.S. dollar and the Swedish krona was 10.0 krona = $1, and the…

A: SEK/USD = 10 USD/GBP = 1.5

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.