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Suppose you travel to Mexico and the exchange rate at the airport is as following: the bid rate is $0.05 and the ask rate $0.07.

Suppose you travel to Mexico and the exchange rate at the airport is as following: the bid rate is $0.05 and the ask rate $0.07. If you want to exchange $1000 for pesos, how many pesos will you receive?



After receiving your pesos you decide to convert back into dollars, hoe much dollars will you revive? Separately, compute the bid/ask percentage spread.

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