- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 15. Currency Exchange Rates
- Subject 3. Cross-Rate Calculations

###
**CFA Practice Question**

Suppose the Brazilian real is quoted at US$:R = 0.9955-1.0076 and the Thai baht is quoted at US$:B = 25.2513-3986. What is the direct quote for the real in Bangkok (R:B=?)?

A. 30.5541 - 6456

B. 25.1376 - 2654

C. 25.0608 - 5134

**Explanation:**Bid cross rate for the real R:B = 25.2513/1.0076 = 25.0608

Ask cross rate for the real R:B = 25.3986/0.9955 = 25.5134

Therefore, the direct quotes for the real in Bangkok are R:B = 25.0608 - 5134.

###
**User Contributed Comments**
4

User |
Comment |
---|---|

acemaj |
Can someone please explain? |

Procbaby1 |
In calculating cross rates you should always assume that you have to sell a currency at the lower rate and buy it at the high rate, giving you the worse possible rate. |

CJPerugini |
Just remember you always bid for the lowest and ask for the highest. The rest is just convention. |

Lambo83 |
USD:THB means USD is the price currency so 25.2513-3986 is wrong. Or the quote is right but should be THB:USD. Having it as THB:USD is the ratio, how many THB to one USD. |