8. Suppose the spot ask exchange rate, Sa($|£), is $1.90 = £1.00 and the spot bid exchange rate, Sb($|£), is $1.89 = £1.00. If you were to buy £10,000,000 worth of $ and then sell them five minutes later Can I use above spot rate to calculate bid-ask spread of whole transaction , if yes please give further explanation why you use each rate to calculation in each step and show calculation of bid-ask spread what's each process called e.g. indirect bid,direct ask. Why?
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90 = £ 1.00 \) means you need $1.90 to buy £1. - The spot bid exchange rate \( S^{b}(\$ \mid £) = \$ 1.89 = £ 1.00 \) means you get $1.89 when you sell £1. Show more…
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10. If the $/€ bid and ask prices are $1.50/€ and $1.51/€, respectively, the corresponding €/$ bid and ask prices are and show calculating step by step also concept for calculating. Note that you illustrate all occurred process to make students who have roughly derivative and international financial knowledge understand easier. Thank you so much for your help. a) €0.6667 and €0.6623. b) $1.51 and $1.50. c) €0.6623 and €0.6667. d) cannot be determined with the information given.
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