Question

A MNC receives the following quotation: CAD1: USD 0.9256-90 If this MNC wants to sell 1...

A MNC receives the following quotation:
CAD1: USD 0.9256-90

If this MNC wants to sell 1 million CAD, how much USD it will receive?

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Answer #1

Bid price is a price at which buyers are ready to buy and ask price is a price at which sellers are ready to sell .so if you want to sell CAD ,you will sell at a price at which buyers are ready to buy that is bid price

USD received = Exchange rate* Amount in CAD

                    = .9256* 1,000,000

                    = $ 925,600

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