CFA Practice Question

There are 341 practice questions for this study session.

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.
You need to log in first to add your comment.