Suppose that the Canadian dollar is worth A$1.08 and the United States dollar is worth A$1.35. (a) Calculate the value of the Australian dollar against the Canadian dollar.  (b) Using your answer to (a), calculate the cross exchange rate between the Canadian dollar and the United States dollar.

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: If the exchange rate for Canadian and U.S. dollars is 0.92777 to 1, this implies that 13 Canadian…

A: Value of 1 Canadian dollar in US dollar = 1/0.92777 = 1.07785334727

Q: During this coming year assuming interest rate parity, a.)you predict that the percentage change in…

A: Forward exchange rate from a spot exchange rate is calculated by this formula:

Q: A bank is quoting the following exchange rates against the dollar for the Swiss franc and the…

A: Formula used:

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: 1. What is the price of 1 US dollar in terms of each of the following currencies, given the…

A: Exchange rate is that rate at which currencies of two countries can be exchanged with each other.

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: Assume poland's currency (the zloty) is worth $0.17 and the Newzealand dollar (NZ$) is worth $0.005.…

A: Cross rate is the rate at which one currency is exchanged with another currency. Cross rate defines…

Q: Calculate the relative bid-ask spread for the following exchange rates. How much money you will lose…

A: Currency is the medium of a country through which goods and services are exchanged or traded within…

Q: Suppose the exchange rate between the U.S. dollar and the Swedish kronawas 7.97 krona =$1, and the…

A: Exchange rate is the rate at which one currency of a country is exchanged with currency 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: Suppose the exchange rate between U.S. dollars and the Swiss franc is SFr1.6 =$1 and the exchange…

A: Cross rate is the exchange rate between two countries’ currencies where direct exchange rate is not…

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: A bank is quoting the following exchange rates against the dollar for the Swiss franc and the…

A: Cross Rate: Cross Rate is the rate calculated when the direct exchange rate between the currency are…

Q: Suppose you are a U.S. investor who is planning to invest $295,000 in Japan. You do so at a starting…

A: Given: Investment = $295,000 Spot exchange rate = 85.98¥/$ Interest rate = 8.70% Ending exchange…

Q: Given the interest rates of the U.S. and Japan are similar but the Japanese yen is expected to…

A: When one currency appreciates against the other, it reflects that the given currency is stronger…

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: 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: 1. Assume the following exchange rates for the New Zealand dollar in terms of the US dollar: North…

A: Locational arbitrage is possible when there are discrepancies in the quotation of exchange rates by…

Q: Given S(USD/AUD) = 0.7899, the price of a consumption basket in the US is$100 and the price of the…

A: The foreign exchange rate or for-ex is the rate of exchanging currency between different countries…

Q: Given the interest rates in the U.S. and Canada are similar, if the Canadian dollar is expected to…

A: The above statement can be understood with an example below. Let suppose the exchange rate 1 US…

Q: In the past, the U.S. dollar's exchange rate with the Iceland krona was 0.0008 dollars per krona. If…

A: 1 Krona = 0.0008 1 krona = 0.0006

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: Assume that 90-day U.S. securities have a 3.5% annualized interest rate, whereas90-day Canadian…

A: Formula to calculate the 90 day forward exchange rate between US & Canadian dollars is: Forward…

Q: Under a flexible exchange rate system, an increase in the value of the U.S. dollarin tems of other…

A: Exchange rate system is a way in which exchange rate is determined that is the value of domestic…

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 that today 1 Canadian dollar is worth 0.75 U.S. dollar. How many Canadiandollars would you…

A: Given  1 Canadian dollar is equal to 0.75 US Dollars

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: 1. Consider the exchange rate between U.S. Dollar and New Zealand Dollar: USD/NZD. If the exchange…

A: The total impact/increase in the exchange rate is the composite impact of real rate increase and…

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: If the price of a Big Mac hamburger in the US is $3.99 and the price of a Big Mac hamburger is $6.60…

A: It is seen that a big mac hamburger costs In US is $3.99 In Australia is $6.60 It is also given that…

Q: You are given the exchange rate between the U.S. dollar and the Canadian dollar. You are also given…

A: Swap rate is usually used as an interest rate swap where the fixed interest rate is exchanged for a…

Q: 23) If the Canadian dollar to U.S. dollar exchange rate is 1.35 and the British pound to U.S. dollar…

A: The value of one country's currency in terms of another country's currency is known as the exchange…

Q: If the spot rates are $0.50/NZ$ and the spot rate is C$0.55/NZ$. The interest rate in USA is 9% and…

A: The forward exchange rate is the exchange rate at which a bank decides to exchange one currency for…

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

A: Due to triangular arbitrage there are mispricing in market due to which buying and selling happens…

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.