Suppose that a commercial bank's current quote for transactions involving the United States dollar is A$1.3214- A$1.3298. (a) State the ask and bid prices for the bank. (b) Calculate the bid/ask spread for the bank.
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- Suppose that a commercial bank’s current quote for transactions involving the United Kingdom pound is A$1.9120/75. (a) Define the ask and bid prices in general terms, and state the ask and bid prices for the bank. (b) Define the bid/ask spread in general terms, and calculate the bid/ask spread for the bank. (c) Explain briefly why the United Kingdom does not use the Euro as its currencyAssume the following bid and ask rates of the pound for two banks as shown below: Bid Ask Bank A $1.40 $1.41 Bank B $1.38 $1.39 As locational arbitrage occurs, _______. A. the bid rate for pounds at Bank A will decrease; the ask rate for pounds at Bank B will increase B. the bid rate for pounds at Bank A will increase; the ask rate for pounds at Bank B will increase C. the bid rate for pounds at Bank A will increase; the ask rate for pounds at Bank B will decrease D. the bid rate for pounds at Bank A will decrease; the ask rate for pounds at Bank B will decreaseA large bank is quoting the following spot exchange rates for number of YEN per USD, number of THB per USD and number of YEN per THB respectively. YEN/USD = 116.91 -- 116.95 THB/USD = 44.30 -- 44.40 YEN/THB = 2.6900 -- 2.7100. You are trader at Axe Capital, a US hedge fund, and your job is to try to find arbitrages in the currency markets. You have 10 mio USD risk capital provided by your fund. Using the 10 mio USD risk capital, how much arbitrage (guaranteed risk-free) profit can you make. If there is no arbitrage possible, enter zero. Give your answer in USD to the nearest USD. Please Do your calculation in excel and do not round anything until the very end.
- A Bank has the following balance sheet (in millions), with the risk weights in parentheses. In addition, the bank has $30 million in commercial direct-credit substitute standby letters of credit to a public corporation and $30 million in 10-year FX forward contracts that are in the money by $2 million. a. What are the risk-adjusted on-balance-sheet assets of the bank as defined under the Basel III? (I have this answer which should follow into question B) Cash = $19 x 0% = 0 Mortgage Loan = $65 x 50% = $32.50 Consumer Loans = $155 x 100% = $155 Therefore, the Total Risk-Adjusted On-Balance Sheet Assets is $187.50. (Unless you suggest to round to $188 for below calculations please let me know) b. What are the: Common Equity Tier I (CET1) Risk-Based Capital Ratio Tier I Risk-Based Capital Ratio The Total Risk–Based Capital Ratio? *PLEASE HELP WITH B!!! Confused with which numbers on the balance sheet to include in the Common Equity Tier 1 Capital (CET 1), Additional Tier…Suppose you work at the FOREX desk of a multinational bank. No particular country is the home country for you as your responsibility is to conduct foreign exchange trade in whichever way is profitable for the bank. Using this as your guideline, consider the following data: S0 = ¥92/US$ S180 = ¥92/US$ IUS = 2% per annum IJapan = 0.09% per annum With a starting amount of US$10 million or its Yen equivalent, can you make a UIA profit? What if a CIA was conducted at F180 of ¥90/US$? What are your observations?Read the following information: American Bank quotes a bid rate of $0.026 and an ask rate of $0.028 for the Indian rupee (INR); Indian national bank quotes a bid rate of $0.024 and an ask rate for $0.025. Locational arbitrage would involve _______. A. buying rupees from National Bank at the bid rate and selling them to American Bank at the ask rate B. buying rupees from National Bank at the ask rate and selling them to American Bank at the bid rate C. buying rupees from American Bank at the ask rate and selling to National Bank at the bid rate D. buying rupees from American Bank at the bid rate and selling them to National Bank at the ask rate
- For the next few questions, here are the currency rates quoted to you buy ABC Bank, the bank that you do all your FX business with. EUR/USD – 1.1805 – 08 USD/CAD – 1.2590 – 93 GBP/USD – 1.3745 – 48 USD/JPY – 108.95 – 98 What would be the quote you would receive from the bank if you were looking for a EUR/GBP cross rate? What would be the quote you would receive from the bank if you were looking for a CAD/JPY cross rate? You have received the above quotes from the bank. You need to buy CAD 500,000 and sell EUR 445,000. What will be the US$ amounts for each of these transactions?A bank is quoting the following exchange rates against the dollar for the Swiss franc and the Australian dollar: SFr/$ = 1.5960 − 70 A$/$ = 1.7225 − 35 An Australian firm asks the bank for an A$/SFr quote. What cross-rate would the bank quote?A bank is quoting the following exchange rates against the dollar for the Swiss franc and the Australian dollar: SFr/$ = 1.4970 − 80 A$/$ = 1.6237 − 47 An Australian firm asks the bank for an SFr/A$ quote. What cross-rate would the bank quote? (Round your answers to 4 decimal places.)
- Assume that a bank bid rate on Swiss francs i 0.25 British pound andits ask rate is 0.26 British pound. Its bid ask percentage spread is: O a 417% Ob. 385% Oc 4% O d 426%A bank dealing in foreign currency tells you that the foreign currency will buy you $.80 US dollars. The bank has given you a. a direct quote. b. an indirect quote. c. the official (fixed) rate. d. a forward rate.If the Fed makes a discount loan of $20 million to a commercial bank, the Fed's balance sheet will show Select one: a. a decrease in discount loans of $20 million and an increase in bank reserves of $20 million. b. an increase in discount loans of $20 million and a decrease in bank reserves of $20 million c. a decrease in discount loans of $20 million and a decrease in bank reserves of $20 million. d. an increase in discount loans of $20 million and an increase in bank reserves of $20 million For upvote solve in one hour