DM/S$ currency versus currency bid-ask quotations
Provided the given information, state the DM/S$ currency versus the currency bid-ask quotations? Bank Quotations American Terms European Terms Bid Ask Bid Ask Deutsche Marks .6784 .6789 1.4730 1.4741 Singapore Dollar .6999 .7002 1.4282 1.4288
Provided the given information, state the DM/S$ currency versus the currency bid-ask quotations?
Bank Quotations American Terms European Terms
Bid Ask Bid Ask
Deutsche Marks .6784 .6789 1.4730 1.4741
Singapore Dollar .6999 .7002 1.4282 1.4288
Expert
Equation 4.12 from text implies S(DM/S$b) = S($/S$b) x S(DM/$b) = .6999 x 1.4730 = 1.0310. The reciprocal, 1/S(DM/S$b) = S(S$/DMa) = .9699. Analogously, it is implied that S(DM/S$a) = S($/S$a) x S(DM/$a) = .7002 x 1.4741 = 1.0322. The reciprocal, 1/S(DM/S$a) = S(S$/DMb) = .9688.
Therefore, the DM/S$ bid-ask spread is DM1.0310-DM1.0322 and the S$/DM spread is S$0.9688-S$0.9699.
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