Suppose that the Canadian dollar is worth A$1.08 and the United States dollar is worth A$1.35. (a) Calculate the value of the Australian dollar against the Canadian dollar.  (b) Using your answer to (a), calculate the cross exchange rate between the Canadian dollar and the United States dollar.

Q: _1). is a market for The foreign exchange market converting the currency of one country into that of…

A: “Since you have posted a question with multiple subparts, we will solve first three subparts for…

Q: Suppose quotes for the dollar-euro exchange rate Es/e are as follows: in New York $1.05 per euro,…

A: The difference is exchange rate creates arbitrage opportunities and it is used by the investors to…

Q: An Australian firm asks the bank for an AS/SFr quote because it received SFr and wants to change it…

A: Calculate the ask rate of US$/SFR by dividing 1 by the bid rate of SFR/US$ which is 1.4950. Thus,…

Q: The most recent currency exchange rate between the British Pound (GBP) and the US Dollar (US) is…

A: The question is based on the concept of Foreign Exchange Management.The forex market enables…

Q: If the Brazilian real is equal to $0.46, a Canadian dollar is equal to how many Brazilian reals?

A: 1 Brazilian real is equal to $0.46, therefore exchange rate is 1 Brazilian real = $0.46

Q: Suppose that the current exchange rate is €0.70 = $1.00. The direct quote, from the U.S. perspective…

A: Exchange rate is €0.70 = $1.00The current exchange rate refers to the current value of one currency…

Q: You need to convert some Swiss francs into euros (€). In addition to quoting the dollar/franc…

A: Exchange Rate ($/CHF) = $1.05/CHF Exchange Rate ($/∈) = $1.15/∈

Q: Suppose Dassie Bank quoted the exchange rate of Singapore dollar in US$ at $0.60, the pound rate in…

A: Foreign currency exchange rates are rates used for exchange of one currency into another currency.…

Q: Assume poland's currency (the zloty) is worth $0.17 and the Newzealand dollar (NZ$) is worth $0.005.…

A: Cross rate is the rate at which one currency is exchanged with another currency. Cross rate defines…

Q: Based on the reading and the table above, is the exchange rate of dollars to pounds fixed or…

A: To determine whether the exchange rate of dollars to pounds is fixed or flexible, we need to look at…

Q: The equilibrium exchange rate of pounds is USD1.70. At an exchange rate of USD1.72 per pound: *   A)…

A: The equilibrium exchange rate is the rate which is at equilibrium for a long period of time. This…

Q: The next two questions are based on the following information Consider the following prices in the…

A: The international fisher effect is used to refer to the relationship between the exchange rate and…

Q: Ve observe Fo> Sera-), where Fo is the direct forward exchange rate, Ta is the domestic risk-free…

A: Concept. Theoretical forward rates are calculated to estimate forward rates and compare them with…

Q: The following graph depicts the supply schedule for euros (orange line) and the demand schedule for…

A: The Equilibrium happens at a point where the demand and schedule intersects, the intersection point…

Q: Assume that the one-year interest rate is 3% p.a. in the UK and 2% p.a. in the Euro area. Also,…

A: Step 1: Analyzing the Interest Rate Parity (IRP) TheoryAccording to the IRP theory, the forward…

Q: 3

A: Arbitrage is an investment strategy where traders simultaneously buys and sells an asset in…

Q: Consider the following table, which reports the spot exchange rate between the dollar and the pound,…

A: Spot exchange rate ($/£)1.1122r US %r UK %1 month2.10%2.10%3 month2.90%2.50%6 month4%2.90%1…

Q: Suppose a U.S. investor wishes to invest in a British firm currently selling for £33 per share. The…

A: Exchange rates denote the relative value between two currencies and play a pivotal role in…

Q: Suppose Dassie Bank quoted the exchange rate of Singapore dollar in US$ at $0.60, the pound rate in…

A: Foreign exchange currency rates are those rates which are used for exchange of one foreign currency…

Q: is the cross-rate in terms of yen per pound? B. Suppose the cross - rate is ¥136 = £1. Is there an…

A: The worth of two currencies, or the amount of one currency that can be exchanged for one unit of…

Q: Suppose the exchange rate between U.S. dollars and British Pounds is $1.00 = 1.70 Pounds and the…

A: Exchange rate between U.S. dollars and British Pounds = 1.70 Pounds per dollar Exchange rate between…

Q: Suppose that the current exchange rate is €1.00 = $1.80. The indirect quote, from the U.S.…

A: An indirect quote of currency refers to a method of quoting exchange rates where the domestic…

Q: Suppose the exchange rate between U.S. dollars and British Pounds is $1.00 = 1.56 Pounds and the…

A: exchange rate between U.S. dollars and British Pounds = 1.56 Pounds per dollar exchange rate between…

Q: Suppose that the interest rates in the U.S. and Germany are equal to 5%, that the forward (one year)…

A: Foreign exchange rate is the rate at which the currency of one country can be exchanged for another…

Q: Suppose the Japanese yen exchange rate is ¥116/$ and the British pond exchange rate is $1.27/£. a)…

A: Arbitrage refers to the strategy of earning profits by exploiting the difference in prices of the…

Q: Use the information below to answer the following questions. CURRENCY PER U.S. U.S. $ EQUIVALENT…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: Using belo ve exchange Country A in year 1 having set year 0's index equal to 100 in both cases.…

A: NEER (Nominal Effective Exchange Rate) is a currency index that measures the value of a country's…

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.