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In: Finance

Bank X’s bid rate on euros is US$1.10 and its ask rate is US$1.128. (a) Calculate...

Bank X’s bid rate on euros is US$1.10 and its ask rate is US$1.128.

  1. (a) Calculate the bid/ask spread of euros (in %).

  2. (b) Calculate the amount of euros that you can get from selling US$200,000.

  3. (c) Explain how the following factors affects sizes of bid-ask spreads:

    1. (i) Inventory costs

    2. (ii) Competition with other banks

Solutions

Expert Solution

jeff jeffy answered 6 months ago
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