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--60

A$/US$ = 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

Show your workings and the correct answer in the space provided below,

For example write your answer as: Spot Bid (A$/SFR) = 1.0457/1.0392 = 1.0063

Briefly explain (in one or two sentences) what the meaning is of the SFr/A$ bid rate that you calculated in the previous question.