A currency trader observes the following quotes in the spot market:   1 U.S. dollar = 1.21 Japanese yen 1 British pound = 2.25 Swiss francs 1 British pound = 1.65 U.S. dollars Given this information, how many yen can be purchased for 1 Swiss franc? Do not round the intermediate calculations and round the final answer to four decimal places. Question options:   1.0825   0.7897   0.7631   0.6921   0.8873

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A: Spread % = Ask Price - Bid PriceAsk Price x 100

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

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Q: Use the information below to answer the following questions.     U.S. $ EQUIVALENT CURRENCY PER U.S.…

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Q: Suppose the current exchange rate is $1.77/E, the interest rate in the United States is 5.08%, the…

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Q: In the spot market $1 = 5 Euro, 1 Euro = 25 Canadian Dollar, and 1 Canadian Dollar = 0.75 Japanese…

A: $1 = 5 Euro 1 Euro = 25 Canadian dollar 1 Canadian dollar = 0.75 Japanese Yen

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A: Triangular arbitrage means taking advantage of the arbitrage opportunity that exists in the currency…

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

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Q: Use the information below to answer the following questions.     U.S. $ EQUIVALENT CURRENCY PER U.S.…

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

Q: May I get part C and D Given below are a set of foreign exchange quotes for several currencies…

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A: Bid on (€/£) = 1/ Ask ($/€) Ask ($/€) = $1.4742 Bid ($/£) = $1.9712

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

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Q: If Bank A quotes you an exchange rate of $1.11 per pound. The same bank also quotes exchange rates…

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

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Q: how many dollars would be required to purchase 1,000 units of each of the following: British pounds,…

A: Information Provided:

Q: Assume that 90-day U.S. securities have a 2.9% annualized interest rate, whereas 90-day Canadian…

A: The given problem can be solved using interest rate parity.

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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.