Using the following quotations:USD / EGP 46.8680 / 46.9280USD/JMD 151.1230 / 154.4150(a) What is the cross rate between the Egyptian Pound and the Jamaican Dollar. Present the quotation in direct form as thedealer's buy and sell prices for the Egyptian Pound (4 decimal places). Show all workings.(b) What is the size of the spread of the cross rate as a percentage of the ask price?

In international business one has to pay for a third country's currency through another currency…

Using the following quotations: USD / EGP 46.8680/46.9280 USD/JMD 151.1230/154.4150 (a) What is the cross rate between the Egyptian Pound and the Jamaican Dollar. Present the quotation i dealer's buy and sell prices for the Egyptian Pound (4 decimal places). Show all workings.

Using the following quotations: USD / EGP 46.8680/46.9280 USD/JMD 151.1230/154.4150 (a) What is the cross rate between the Egyptian Pound and the Jamaican Dollar. Present the quotation i dealer's buy and sell prices for the Egyptian Pound (4 decimal places). Show all workings.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter4: Exchange Rate Determination

Section: Chapter Questions

Problem 1BIC

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Concept explainers

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.

Question

Using the following quotations:
USD / EGP 46.8680 / 46.9280
USD/JMD 151.1230 / 154.4150
(a) What is the cross rate between the Egyptian Pound and the Jamaican Dollar. Present the quotation in direct form as the
dealer's buy and sell prices for the Egyptian Pound (4 decimal places). Show all workings.
(b) What is the size of the spread of the cross rate as a percentage of the ask price?

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