Question

Can someone please give me a detailed explanation of how to solve these? thank you!

QUESTION 4 Use the following information to answer the next two questions. Suppose the spot quotes for the Mexican pesos and pounds are $.1252‑58 and $1.055‑62, respectively. What is the ask quote for pounds in terms of pesos? Round intermediate calculations to four decimal places.

8.4420

8.4265

8.4824

8.3125

Question 5 Find the bid quote for pounds in terms of pesos. Round intermediate steps and your final answer to four decimals. Do not use non-numeric characters when entering your answer.

Answer 1

Ask price is the price at which the trader is willing to buy

Bid price is the price at which the trader is willing to sell

In the case the ask price for Mexican Peso=$0.1252

Ask price for Pound=$1.055

1. pound=$.055

. 1 dollar=(1/0.1252) Mexican Pesos

1$=7.98722 Peso

$1.055 =(1.055*7.98722) Peso=8.4265 Pesos

1Pound=8.4265 Pesos

8.4265

Q5.

Bid Quotes:

In the case the bid price for Mexican Peso=$0.1258

Ask price for Pound=$1.062

1. pound=$.062

. 1 dollar=(1/0.1258) Mexican Pesos

1$=7.949126 Peso

$1.062 =(1.062*7.949126) Peso=8.441971 Pesos

1 Pound =8.441971 Peso

Rounded to 4 decimal

1 Pound=8.4420 Pesos