In: Finance
Use the information below to calculate the ask cross rate between C$ and € in the "C$/€ " format.
Bid | Ask | |
Canadian Dollar | $0.7505 | $0.7786 |
Euro | $1.1536 | $1.1692 |
Answer Format: Keep four decimals; use the price currency as the unit. Example: 4.1234(C$) or 4.1234(€)
Solution:
As per the information given in the question we have
Bid rate of one Canadian Dollar = $ / C$ = $ 0.7505 ;
Ask rate of one Canadian Dollar = $ / C$ = $ 0.7786 ;
Bid rate of one Euro = $ / € = $ 1.1536 ;
Ask rate of one Euro = $ / € = $ 1.1692 ;
To find Ask cross rate for C$ / €
The Ask cross rate for C$ / € is calculated as follows :
C$ / € = Ask rate of ( C$ / $ ) * Ask rate of ( $ / € )
Calculation of ( C$ / $ ) Ask Rate :
The Ask Rate of C$ / $ = 1 / ( $ / C$) Bid Rate
= 1 / 0.7505
= 1.332445 C$ Per $
Thus the (C$ / $) Ask Rate = C$ 1.332445 …………………….. (A)
We know that Ask rate of ($ / €) = $ 1.1692 ……………………… (B)
Calculation of C$ / € Ask cross Rate :
Ask Cross Rate ( C$ / € )= Ask rate of ( C$ / $ ) * Ask rate of ( $ / € ) = (A) * (B)
= C$ 1.1332445 * $ 1.1692
= C$ 1.557895
= C$ 1.5579 ( When rounded off to four decimal places )
Thus the ask cross rate between C$ and € in the "C$/€ " format = 1.5579 C$