Question
An Australian firm asks the bank for a SFr/A$ quote because it received SFr and wants to change it to A$. A bank is quoting
An Australian firm asks the bank for a SFr/A$ quote because it received SFr and wants to change it to A$. A bank is quoting the following exchange rates against the US dollar for the Swiss franc and the Australian dollar: SFr/US$ = 1.4950--60A$/US$ = 1.5245--50
Calculate the cross bid rate for the SFr/A$ by identifying the correct formula in the attached formula sheet.
One of the following answers will be correct:
a. 1.0201
b. 1.0213
c. 0.9813
d. 0.9803
Briefly explain (in one or two sentences) what the meaning is of the SFr/A$ bid rate that you calculated in the previous question.
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