Question
QUESTION 1 The table below shows the bid and offer (ask) exchange rates quoted in London: Bid Offer EURUSD ? 1.2135 USDCHF 0.898 0.8985 USDJPY
QUESTION 1
The table below shows the bid and offer (ask) exchange rates quoted in London:
| Bid | Offer | |
| EURUSD | ? | 1.2135 |
| USDCHF | 0.898 | 0.8985 |
| USDJPY | 110 | 110.1 |
| USDRUB | ? | ? |
| USDTRY | 8.503 | 8.511 |
| EURTRY | 10.3141 | ? |
| RUBTRY | 0.118097222 | 0.11837274 |
REQUIREMENTS
(a) Calculate the bid and offer exchange rates missing in the table. (6 marks)
(b) How much Swiss francs (CHF) can I buy with my 1 million euros? (3 marks)
(c) Suppose, bid and offer for USDCHF in Tokyo are 0.887 and 0.8875. How much arbitrage profit can a Japanese investor with 1 million yens make? Hint: the transactions of this Japanese investor involve buying and selling currencies int Tokyo and London. (5 marks)
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Quantitative Methods For Business
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey Cam
11th Edition
978-0324651812, 324651813, 978-0324651751
