A New Zealand company needs to make a payment of 75,000 Canadian dollars (CAD). It receives a two-sided quote on the NZD/CAD exchange rate from a dealer of 1.1888/1.1903. Note: the rate is quoted as the number of NZD per CAD. Complete all questions below by choosing the correct answer. (a) The amount that it will cost the company in New Zealand dollars to purchase the required CAD is closest to: Select one alternative: O NZD 63,090 O NZD 89,160 O NZD 63,008 O NZD 89,273 (b) In general, the bid-ask spread is likely to be higher in all of the following situations except: Select one alternative: O when the order size is smaller. O during times of market stress. O when the currencies involved are traded less often. O when the number of dealers providing quotes is higher.
A New Zealand company needs to make a payment of 75,000 Canadian dollars (CAD). It receives a two-sided quote on the NZD/CAD exchange rate from a dealer of 1.1888/1.1903. Note: the rate is quoted as the number of NZD per CAD. Complete all questions below by choosing the correct answer. (a) The amount that it will cost the company in New Zealand dollars to purchase the required CAD is closest to: Select one alternative: O NZD 63,090 O NZD 89,160 O NZD 63,008 O NZD 89,273 (b) In general, the bid-ask spread is likely to be higher in all of the following situations except: Select one alternative: O when the order size is smaller. O during times of market stress. O when the currencies involved are traded less often. O when the number of dealers providing quotes is higher.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A New Zealand company needs to make a payment of 75,000 Canadian dollars (CAD). It receives a two-sided
quote on the NZD/CAD exchange rate from a dealer of 1.1888/1.1903. Note: the rate is quoted as the number of
NZD per CAD.
Complete all questions below by choosing the correct answer.
(a) The amount that it will cost the company in New Zealand dollars to purchase the required CAD is closest to:
Select one alternative:
O NZD 63,090
O NZD 89,160
O NZD 63,008
O NZD 89,273
(b) In general, the bid-ask spread is likely to be higher in all of the following situations except:
Select one alternative:
O when the order size is smaller.
O during times of market stress.
O when the currencies involved are traded less often.
O when the number of dealers providing quotes is higher.
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