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zacharie101
Sep 28, 2012, 05:30 PM
Can solve these questions for me. I posted what I found below tell me if I did it right.

1. Assume that the bid-ask spread for the USD/GBP exchange rate in percentage terms is equal to 0.06%. If the dealer’s ask quote is 1.50 USD/GBP, then at what price are you going to sell British pounds for American dollars?

2. If the real exchange rate between two monies is equal to 1, and the general price levels in the local and foreign economies are equal to 100 and 150 respectively, what is the nominal exchange rate expressed in direct terms?

3.Every ________ can be considered to have a corresponding flow of foreign money associated with it, and this flow of foreign money is recorded as a ________.
A)
current account transaction
B)
capital account transaction
C)
credit transaction
D)
debit transaction





1. 1.50*.06=.09

2. (150/100-1)*100=50

3. I got B

please tell me if what I did was right