Question 1. From a Frenchman's point of view, which of each pair of quotes is the direct quote? Which is the indirect quote?
(a) (FRF/GBP) = 9 (GBP/FRF) = 0.11
(b) (USD/FRF) = 0.17 (FRF/USD) = 5.9
Question 2. You read in your newspaper that yesterday's spot quote was CAD/GBP 1.60 - 1.65
(a) This is a quote for which currency?
(b) What is the margin as a percentage of the mid-exchange rate?
(c) What is the ask rate for CAD?
(d) What is the bid rate for CAD?
(e) What is the ask rate for GBP?
(f) What is the bid rate for GBP?
Question 3. The exchange rate between the British pound and the Australian dollar (GBP/AUD) changed from 0.3780 to 0.3960 in one week.
(a) What happened to AUD? Calculate the percentage of that.
(b) What happened to GBP? Calculate the percentage of that.