Mrs Ireen Ndhlovu kaleji has US$ 2,000 which she is planning to exchange with Zambian Kwacha. She inquires from the bank and is given the following information: Ask price Bid price 1 USD K10 K9.5 1 ZWM K0.806 K0.79 The other information showed the following: Ask price Bid price 1 ZMW US$ 0.10 US$ 0.105 1 ZMW ZAR 1.241 ZAR 1.268 a) Explain to Mrs. Kaleji the differences of the quotations given above and the differences between BID and ASK prices in exchange rate
Mrs Ireen Ndhlovu kaleji has US$ 2,000 which she is planning to exchange with Zambian Kwacha. She inquires from the bank and is given the following information:
Ask price Bid price
1 USD K10 K9.5
1 ZWM K0.806 K0.79
The other information showed the following:
Ask price Bid price
1 ZMW US$ 0.10 US$ 0.105
1 ZMW ZAR 1.241 ZAR 1.268
a) Explain to Mrs. Kaleji the differences of the quotations given above and the differences between BID and ASK prices in exchange rate
b) How much Zambian kwacha is Mrs Kaleji expecting to be given by the bank if she sells US$ 2,000 and How much South African is Mrs Kaleji expecting if she sold US$ 2,000 to the bank
c) Explain the functions of the exchange rate in international trade
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