Next summer, you and your sister, Judy, plan to participate in the Study Abroad program. You plan to go to London, U.K. and Judy will visit Geneva, Switzerland. Both of you need to transfer your USD to the respective foreign currency right now. Here is the market data: (GBP and CHF mean the Great British Pound and the Swiss Franc, respectively.) GBPUSD spot rate: the big figure is 1.37; market quotes are: 91/95. USDCHF spot rate: the big figure is 0.91; market quotes are: 64/68.

a. What is the exchange rate that you will use to buy GBP? (5 points) What is your bid-ask spread in percentage? (4 points)

b. What is the exchange rate that Judy will use to buy CHF? (5 points) What is her bid-ask spread in percentage? (4 points)

c. What are the GBPCHF cross-exchange bid and ask rates, assuming there is no transaction cost, and the liquidity is very similar? (make sure you use the correct bid or ask rate)(8 points) What is the bid-ask spread in percentage for GBPCHF? (4 points)