Suppose you have the following information:1 USD= 67.265  INR1 GBP= 1.114 USDWhat is the INR/GBP cross rate?

Q: If British pounds sell for $1.30 (U.S.) per pound, what should dollars sellfor in pounds per dollar?

A: Exchange rate : The rate at which the two different currencies are effectively exchanged is defined…

Q: Assume that the indirect quote is for 10.0 Mexican pesos per U.S.dollar. What is the direct quote…

A: Given indirect quote is 10 Mexican pesos per US dollar. Formula for direct quote: Direct quote = 1/…

Q: d exactly, then the yen would trade at one yen to the dollar. True or False? Explain.

A: Purchasing power parity say that prices all over the world should be one and same and law of one…

Q: Compute the profit from triangular profit ir the bid and ask rate for pound and US$ are 0.70…

A: Triangular arbitrage is the situation when there is a discrepancy between 3 foreign currencies. This…

Q: Solve all questions , otherwise I will give you downvote       CIP stands for covered interest…

A: An interest rate and exchange rate link is provided by the covered interest parity (CIP) theory of…

Q: Assume that 1 unit of Currency Y costs 0.49 units of Currency X, 1 unit of Currency Z costs 7.99…

A: Cross exchange rates Cross exchange rates are used to determine the true exchange rate between…

Q: Calculate the cross rate between the EUR (the euro) and the INR (Indian rupee). Set it up as…

A: For Computing Cross Rate we first denote the Currency rate as follows A = INR B = USD C = EUR For…

Q: Suppose exchange rate of Japanese yen in US $ is $.010, exchange rate of euro in US $ is $1.34, and…

A: When there are miss match in exchange rates, there is opportunity for triangular arbitrage profit.…

Q: If the ZAR/USD exchange rate declines from 11.2500 to 11.2450, then the fall is equal to     5…

A: Pip means percentage in point or price interest point. It is the measurement of smallest change in…

Q: A computer costs $500 in the United States. The same model costs €550 inFrance. If purchasing power…

A:

Q: If euros sell for $1.50 (U.S.) per euro, what should dollars sell for in eurosper dollar?

A: Direct Quote is a currency quote for foreign currency in per-unit terms of the domestic currency.…

Q: There are two consumers and two goods (A and B) in a competitive economy. At the competitive…

A: Introduction:- The following basic information as follows under:- Two consumers and two goods (A…

Q: A computer cost $1,300 in the United States. The same computer costs € 1,100 euros in Europe.…

A: The purchasing power parity( PPP) states that the cost of two identical goods will be the same in…

Q: if 1 OMR = $ 2.60, so what is the exchange rate in terms of 1 US$?

A: Currency exchange rate is the rate at which one currency can be exchanged i.e. bought or sold for…

Q: you have $1000, the exchange rate is as following: $100: 1 ounce of gold, ￥500: 1 ounce of gold,…

A: Convert 1000 $ into ￥  @ exchange rate ￥8：$1   = 1000$ * 8￥ / $ = 8000 ￥

Q: Suppose that the exchange rate is 0.60 dollars per Swiss franc. If the franc appreciates 10% against…

A: Exchange rate is the value of one country’s currency in exchange of other country’s currency. If…

Q: (a) Determine the cross rate for ARS/OMR? (b) If you wanted to exchange ARS 20,000, how much OMR…

A: Cross Rate = The Exchange Rate between two currencies is calculated using the third currency which…

Q: If a Japanese car costs 1,500,000 yen, a similar American car costs $30,000, and a dollar can buy…

A: Base currency means the currency at the denominator position.

Q: The dollar-euro exchange rate is USD 1.25 = EUR 1, and the dollar-yen exchange rate is JPY 100 = USD…

A: Cross rate for Euro Yen  = USD/EUR * JPY/USD

Q: If one U.S. dollar buys 0.6 euro, hoe many dollars can you purchase for one euro?

A: Solution:- Exchange rate means when one currency is denominated in another currency’s rate.

Q: Compute the profit from triangular profit if the bid and ask rate for yen and euro are 130yen/euro,…

A: Arbitrage profit means sale or purchase of currency in such a way that profit is generated without…

Q: 2. Complete the following table specifying the under and over valuation for each set of currencies.…

A: Here,

Q: A laptop computer costs €1,100 in Europe. The same computer costs GHS 1,540 in Ghana. If we assume…

A: According to purchasing power parity theory, the price of goods or services of one country are…

Q: Given the below quotes for the Japanese Yen and the Malaysian Ringgit, calculate the MYR/JPY cross…

A: USD/JPY 110.38 i.e. USD1 = JPY 110.38 USD/MYR 0.43. i.e. USD 1 = 0.43 MYR

Q: Suppose exchange rates are: EUR/AUD = 1.5550 GBP/AUD = 2.8923 GBP/EUR = 1.8600   Starting with…

A: Arbitrage profits are possible if there is mispricing in the quotes of cross exchange rates.

Q: You are the treasury department of a JFINEX Bank and your client has some excess Euros. If he wants…

A: We will be able to further sell EUR bought from client at prevailing bid rate of inter bank market…

Q: For the below questions use these rates that your bank has quoted you: EUR/USD:        1.0175 –…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: Use the following exchange rates to calculate the cross rates:                EURUSD = 1.0500…

A: EUR/USD = 1.0500 GBP/USD = 1.2505 AUD/USD = 0.7050 USD/JPY = 134.75 USD/MXN = 19.2585 USD/CAD =…

Q: Compute the profit from triangular profit if the bid and ask rate for yen and euro are 130yen/euro,…

A: Triangular arbitrage  is a trading strategy whose profit occurs because the exchange rates of three…

Q: At what rate are you going to sell USD to minimize cost given Dollar Yen quotes from three…

A: We shall sell USD at the maximum bid rate provided by the parties. Bid rate is the rate at which…

Q: US dollar costs 1.30 Canadian dollar (CAD), but the same dollar can be purchased lexican peso (MXN).…

A: The arbitrage is buying and selling same securities in different market.

Q: one U.S. dollar buys 0.61 euro, how many dollars can you purchase for

A: Exchange rate is the value for 1 currency in terms of another currency.

Q: Suppose that 1 Danish krone could be purchased in the foreignexchange market today for $0.16. If the…

A: Given, 1 Danish Krone = $ 0.16 Appreciation in Krone against dollar = 4%

Q: When translating Acceletron’s fi nancial statements into US dollars, Redline is least likelyto use…

A: The question is based on the concept of translation, which is used a currency exchange value for…

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: Suppose you have the following spot exchange rates:   USD/AUD 0.5300 AUD/EUR 1.6428 USD/EUR…

A: Triangular Arbitrage is a trading strategy in which profit is earned from the price differential of…

Q: EUR/USD 0.9395/0.9681 AUD/USD 1.7624/1.7864 JPY/AUD 65.91/67.71   1. What is the cross…

A: first i want to clear that examples given below left hand side Bid rate is given and right hand side…

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 you observe the following direct spot quotations in New York and Toronto, respectively: USD…

A: First, we will convert the rate of Toronto to match the quotation in Newyork. Then we will look…

Q: The graph below shows contingency net profits for a buyer of a Swiss franc (CHI straddle, in which…

A: Call premium is $0.03 Put Premium is $0.04 Exercise Price is $1.09 per CHF Strategy used is Straddle…

Q: If GBP/USD 1.4462/67 and USD/CHF 1.6688/93, what is the GBP/CHF rate?

A: Cross rate- When the exchange rate between 2 currencies is calculated with the help of a mediator…

Q: If the exchange rate is such that $1 equals 5 euros, then the price of a euro is $5 $1 $0.40 $0.20

A: The exchange rate is the currency value of one country in term of the currency of another country.…

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.