Use the rates provided below for the problem. Bid Ask Spot GBP/USD 1.5102 1.5195 Forward (90...
Use the rates provided below for the problem.
| Bid | Ask | ||
| Spot | GBP/USD | 1.5102 | 1.5195 |
| Forward (90 day) | GBP/USD | 1.5005 | 1.5085 |
| Bid | Ask | ||
| Spot | USD/JPY | 123.22 | 128.55 |
| Forward (90 day) | USD/JPY | 120.25 | 122.35 |
How many JPY can you get for GBP 50 million today? Calculate Bid and Ask for GBP/JPY and show the calculations in details.
Homework Answers
As when we want to buy anything in the open market, one can buy it at the price the seller is selling it.
So when 1 GBP = 1.5195 USD,
50 millionGBP = 75,975,000 USD. (50,000,000 x 1.5195)
1 USD = 128.55 JPY
Therefore, 75,975,000 USD = 9,766,586,250 JPY. (75,975,000 x 128.55).
Regarding Bid and Ask Spread.
The equation given here in the question is as follows :
GBP / USD and USD/ JPY. So if we multiply them, USD would be cancelled and the Resulted outcome would be GBP/ JPY.
Therefore, The Bid-Ask Spread for GBP/ JPY is as follows:
| BID | ASK | ||
| Spot | GBP/JPY | 186.0868 | 195.3317 |
| Forward ( 90 day) | GBP/JPY | 180.4351 | 184.5649 |
Add Answer to:
Use the rates provided below for the problem.
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Ask
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1.5195
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