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A U.K. firm wants to convert A$200,000 of accounts receivables into U.K. pounds. A currency dealer...

A U.K. firm wants to convert A$200,000 of accounts receivables into U.K. pounds. A currency dealer offers the following bid-ask quotes. The U.K. firm accepts and receives:

per US$
Country BID ASK
Australia (A$) 1.3720 1.3725
UK (£) 0.6667 0.6800

Multiple Choice

  • £97,151.

  • £90,671.

  • None of the options.

  • £99,089.

  • £106,210.

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Answer #1

Convert A$ into US$ and get 200,000/1.3725 = $145,719.49

Convert US$ into Pound 145,719.49*0.6667 = Pounds 97,151.18

Hence, the answer is

  • £97,151

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