q22

An Australian firm asks the bank for an A$/SFr quote because it received SFr and wants to change it to A$. 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 ask rate for the A$/SFR 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 in the space provided as well as the correct answer.

For example write your answer as follows in the space provided below: Spot ask rate (A$/SFR) = 1.4670/1.3980 = 1.0494

Briefly explain (in one or two sentences) what the meaning is of the calculated A$/SFR ask rate.