International finance question
This query is : Resolved
CA Kingsley
(Querist)
30 September 2009
This is with reference to RTP of nov 2009. The problem says that Bid(gbp/euro) = .6858
Ask(gbp/euro) = .6869.
The company has surplus of 725000 euros. To convert it into gbp, i did the following step
1. 725000 euros * bid(gbp/euro)=
725000*.6858 = 497205
I applied bid rate because we sell euros and bank buys euros. Thus i used bid rate (bank prespective)
But the problem is done as 725000*.6869 = 498002.
I feel there is a mistake in RTP solution. Kindly clarify me in this regard.
Ask(gbp/euro) = .6869.
The company has surplus of 725000 euros. To convert it into gbp, i did the following step
1. 725000 euros * bid(gbp/euro)=
725000*.6858 = 497205
I applied bid rate because we sell euros and bank buys euros. Thus i used bid rate (bank prespective)
But the problem is done as 725000*.6869 = 498002.
I feel there is a mistake in RTP solution. Kindly clarify me in this regard.
01 October 2009
you are right
euro 725000
bid gbp/euro 0.6858
ask gbp/euro 0.6869
497205
7250000*.6858
euro 725000
bid gbp/euro 0.6858
ask gbp/euro 0.6869
497205
7250000*.6858
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