--%>
Assignment Help - homework help

Explains DM-S$ currency against currency bid-ask quotations

Given the following information, explains the DM/S$ currency against currency bid-ask quotations?

Bank Quotations                   American Terms                    European Terms

                                                 Bid        Ask                              Bid         Ask

Deutsche Marks                   . 6784    .6789                     1.4730   1.4741

Singapore Dollar                    .6999    .7002                     1.4282   1.4288

 

Equation from the text implies S(DM/S$b) = S($/S$b) x S(DM/$b) = .6999 x 1.4730 = 1.0310.  The reciprocal, 1/S(DM/S$b) = S(S$/DMa) = .9699.  Analogously, this is implied that S(DM/S$a) = S($/S$a) x S(DM/$a) = .7002 x 1.4741 = 1.0322.  The reciprocal, 1/S(DM/S$a) = S(S$/DMb) = .9688.  Therefore, the DM/S$ bid-ask spread is DM1.0310-DM1.0322 & the S$/DM spread is S$0.9688-S$0.9699.

   Related Questions in Financial Management

  • Q : Explain the design patterns of an MFC

    Explain the design patterns of an MFC application?

    		•
  • Q : How one would invest in first stock or

    How was Markowitz show that one would invest in the first stock or may be sold the second stock?

    		•
  • Q : Describe Euronote market Describe

    Describe Euronote marketEuronotes are short-term notes written through a group of international investment or commercial banks termed a “facility.”  A client-borrower makes an agreement along with a facility to issue Euronotes i

    		•
  • Q : Trading at small figure bid-ask of 35-40

    A CD/$ bank trader is at present quoting a small figure bid-ask of 35-40, while the rest of the market is trading at CD1.3436-CD1.3441. What is implied regarding the trader's beliefs by his prices?The trader have to think the Canadian dollar wi

    		•
  • Q : What is GATT and what is its goal? What

    What is GATT and what is its goal?

    		•
  • Q : Risk-averse investor will pay off for

    The risk-averse investor will pay off for risk when he will take on an investment project. Explain

    		•
  • Q : Way to incorporate management goals

    Explain in brief the way to incorporate management goals into pro forma financial statements.

    		•
  • Q : Illustrates an example of Poisson

    Illustrates an example of Poisson Process?

    		•
  • Q : Find QSD and set up

    Company A is a AAA-rated firm wanting to issue five-year FRNs. It determines that it can issue FRNs at six-month LIBOR + 1/8 percent or at the six-month Treasury-bill rate + ½ percent. Specified its asset structure, LIBOR is the preferred index. Comp

    		•
  • Q : Question on floating-rate Your firm

    Your firm have just issued five year floating-rate notes indexed to six-month U.S. dollar LIBOR plus 1/4%.  Describe the amount of first coupon payment your firm will pay per U.S. $1,000 of face value, if six-month LIBOR is at present 7.2%?Solution: 

    		•