Question

An MNC wishes to sell EUR 3 million that it received from a French customer and obtain its domestic currency (USD). The following alternatives are available. Determine which bank provides the highest amount of USD.
Bank Currency Pair      Bid                 Ask                  Commission
A        EURUSD            1.3512            1.3519             USD 250
B        EURUSD            1.3511            1.3520             USD 100
C        USDEUR            0.7400            0.7405             USD 150

Answer 1

EURUSD_bid = 1 / USDEUR_ask

EURUSD_ask = 1 / USDEUR_bid

For Bank C

EURUSD_bid = 1 / USDEUR_ask

EURUSD_bid = 1 / 0.7405 = 1.350439

Since MNC wants to sell EUROS, EURUSD_bid will be used

Bank	EURUSD Bid	Amount Converted	Fees	Amt rcd net off fees
A	1.3512	4,053,600	250	4,053,350
B	1.3511	4,053,300	100	4,053,200
C	1.35044	4,051,320	150	4,051,170

Bank A provides highest amount of USD