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Cross rates: Bid/Ask Exchange Rates

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Question. Given the following information, compute the EUR/USD bid and ask exchange rates:

1. USD/GBP: Bid-1.750 Ask-1.780
2. GBP/EUR: Bid-0.750 Ask-0.770

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Solution Summary

Cross rates have been calculated using two pairs of Bid/Ask Exchange Rates.

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Please see the attached Excel file for answers:
Looking for help with steps in approaching the following problems...

Given the following information, compute the EUR/USD bid and ask exchange rates
1. USD/GBP: Bid-1.750 Ask-1.780
2. GBP/EUR: Bid-0.750 Ask-0.770

(USD/ GBP) bid rate x (GBP/EUR) bid rate = (USD/EUR ) bid rate= 1.3125 =1.75 *0.75
(USD/ GBP) ask rate x (GBP/EUR) ask rate = (USD/EUR ) ask rate= 1.3706 =1.78 *0.77

Thus
(USD/EUR ) bid rate= 1.3125
(USD/EUR ) ask rate= 1.3706

(EUR/USD) bid rate = 1/ (USD/EUR) ask rate ...

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