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Cross-rate

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You are given the following spot exchange rates:

SFr in Zurich, S(SFr/$): 1.6000-35 SFr/$
£ in NY, S($/£): 1.9810-50 $/£

As a banker in London, you would like to quote a British pound cross-rate for Swiss Franc (i.e., S(£/SFr)). If you anticipate to be the sole banker in the world quoting this cross-rate, what is your quote going to be? Show your work.

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Solution Summary

The solution explains how to calculate the cross rate is examined. The British pound cross-rate for Swiss Francs is determined.

Solution Preview

The cross rate would be the rate at which you will buy SFr from the customers. The cross would be based on the given ...

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