Question

Spot rates are $.1325/MXN bid and $.1345/MXN ask and C$.874/$ bid and C$.876/ask. What are the MXN/C$ big and MXN/C$ ask to 4 decimal places?

Answer 1

Solution:
	MXN 8.4874/C$ bid and MXN 8.6352/C$
Working Notes:
	$.1325/MXN bid and $.1345/MXN ask
	In other word
	1 MXN = $.1325   $.1345	equation 1
	C$.874/$ bid and C$.876/$ ask
	In other word
	1 $= C$.874   C$.876	equation 2
	From Equation 1 & 2
	Common currency is $ and $ is in price position and in base
	so common currency will be eliminated by just multiplying down from equation 1 & 2
	1 MXN = $.1325   $.1345	equation 1
	1 $= C$.874   C$.876	equation 2
get	1 MXN = C$ .1325 x .874     C$.1345 x .876
	1 MXN = C$ .115805    C$ .117822
	we gat C$/MXN
	now convert to MXN/C$ quotation
	here C$ is base currency but we get is MXN as base currency so , we will inverse it to get C$ as base currency
	1 MXN = C$ .115805    C$ .117822
	1 C$ = MXN (1/.117822 )    MXN ( 1 /.115805)
	1 C$ = MXN 8.487379    MXN 8.635205
	1 C$ = MXN 8.4874    MXN 8.6352
Hence	MXN 8.4874/C$ bid and MXN 8.6352/C$
Please feel free to ask if anything about above solution in comment section of the question.