Question
1a) Cornerstone Bank quotes an ask rate of $0.185 for the Nicaragua currency (Nicaraguan crdoba) and a bid rate of $0.182. Calculate the bid/ask percentage
1a) Cornerstone Bank quotes an ask rate of $0.185 for the Nicaragua currency (Nicaraguan crdoba) and a bid rate of $0.182. Calculate the bid/ask percentage spread? (3marks) 1b) Assume that at the start of July 2021 the Mexican peso is worth $0.14 (1 peso = $0.14) and the Canadian dollar is worth $0.68 (C$1 = $0.68). Calculate the value of one Mexican peso in Canadian dollars? (3marks) 1c) Assume that the real interest rate required by savers in Duhok is 2%, and savers expects inflation rate to be 1%. Calculate the nominal interest rate financial institutions would need to offer potential savers to invest in deposits? (3 marks)
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