Using the attached table:
1) Calculate the bid and ask euro-dollar rate.
2) Calculate (showing all the exchange rates used at each step) how many dollars you would end up with if you started with $1,000 USD, and then converted:
1. $1,000 US dollars to Swiss francs
2. Swiss francs to euros
3. Euros to pounds, and then
4. Pounds to U.S. dollars.
1) It looks likes you could do this calculation a couple of ways. You could use pounds, or francs. Using pounds, it would go like this:
The Euro dollar rate is the number of dollars that can be exchanged for one Euro.
Since for every pound is worth $1.50, and .7 pound is worth one Euro, we find:
L/$1.50 x E/.7 L = E/$1.05
Thus the ...
The solution converts currencies using bid and ask rates.