You, a foreign exchange dealer of your bank, are informed that your bank has sold a T.T. on Copenhagen for Danish Kroner 10,00,000 at the rate of Danish Kroner = 6.5150. You are required to cover the transaction either in London or New York market. The rates on that date are as under: Mumbai-London a rode 7$ Blossale *74.3000. Mumbai-New York' off *74.3200 * 49.2625 € 49.2500 DKK 11.4200 DKK 11.4350 DKK 07.5670 DKK 07.5840 London-Copenhagen New York-Copenhagen In which market will you cover the transaction, London or New York, and what will be the exchange profit or loss on the transaction? Ignore brokerages.
You, a foreign exchange dealer of your bank, are informed that your bank has sold a T.T. on Copenhagen for Danish Kroner 10,00,000 at the rate of Danish Kroner = 6.5150. You are required to cover the transaction either in London or New York market. The rates on that date are as under: Mumbai-London a rode 7$ Blossale *74.3000. Mumbai-New York' off *74.3200 * 49.2625 € 49.2500 DKK 11.4200 DKK 11.4350 DKK 07.5670 DKK 07.5840 London-Copenhagen New York-Copenhagen In which market will you cover the transaction, London or New York, and what will be the exchange profit or loss on the transaction? Ignore brokerages.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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