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Part 2. Cross rates The highest bid and lowest ask in the NY currency market for...

Part 2. Cross rates

The highest bid and lowest ask in the NY currency market for the listed currencies:

Australian dollar

AUD/USD

0.7190

Chinese yuan

USD/CNY

6.7473

Danish krone

USD/DKK

6.5451

Euro

EUR/USD

1.1415

Jamaican dollar

USD/JMD

132.88

Japanese yen

USD/JPY

109.55

New Zealand dollar

NZD/USD

0.6839

West African franc

USD/XOF

279.50

1 a. What is the implied cross rate prices for exchanging euros and West African francs? Which currency should be the base currency in this cross rate?

b. If a customer sells €1m in exchange for CFA, how many CFA will the customer receive?

2 a. What is the implied cross rate for exchanging Japanese yen and Jamaica dollars? What is the base currency in this cross rate.

b. If a customer sells ¥1m in exchange for $ (Jamaican), how many $ will the customer receive?

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Answer #1

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