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PROBLEMS: 1. A bank is quoting the following exchange rates against the dollar pound and the Australian dollar: for the Briti
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Answer #1

We have to calculate A$/GBP :

Data Given - GBP/USD = 0.6491/0.6494

A$/USD = 1.7225/1.7235

Note the dollars don’t cancel, so we’re going to have to take the reciprocal of GBP/USD to get get USD / GBP. Note that the bid and ask change (BID WILL ALWAYS BE SMALLER THAN THE ASK) -

USD / GBP = 1/ 0.6494 : 1/ 0.6491

= 1.539883 : 1.540595

Now multiply by A$ / USD

AUD/GBP is :

1.7225*1.539883 : 1.7235*1.540595

=2.65245/2.65522

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