In: Accounting
Bid and Ask quotes for the USD priced in EUR and for the Norwegian Krone (NOK) priced in USD are given as follows:
EUR 0.8478 0.8525/USD
USD 0.1250-0.1310/NOK
Calculate the bid and ask cross rates for the NOK priced in EUR terms: S (EUR/bid NOK) and S (EUR/ask NOK).
EUR/bid NOK = Term currency Bid * Base currency ask
EURNOK Bid = EURUSD Bid * USDNOK Ask
EURNOK Bid = 0.8478 * 0.1310
EURNOK Bid or EUR/bid NOK = 0.111062 or 0.1111 - Price at which market buy EUR and sell NOK.
EUR/ask NOK = Term currency Ask * Base currency Bid
EURNOK Ask = EURUSD Bid * USDNOK Ask
EURNOK Ask = 0.8525 * 0.1250
EURNOK Ask or EUR/ask NOK = 0.106563 or 0.1066 - Price at which market sell EUR and buy NOK.
EURNOK Ask or EUR/ask NOK = 0.106563 or 0.1066 - Price at which market sell EUR and buy NOK.