Tutorial 4

Question 1

Bid rate

Answer 1

The rate a bank is willing to buy a currency at

Question 2

Ask rate

Answer 2

The rate a bank is willing to sell a currency at

Question 3

CHF1.3990–1.4000/USD

Answer 3

• Bid rate of CHF1.3990/$( bank will give you 1.3990CHF per dollar
• Ask rate of 1.4000/$ (bank will give you 1$ per 1.4CHF)

Question 4

Expected exchange rate (x)

Answer 4

(X - spot rate) / spot rate = rate of depression/inflation