MAFA QUERY-FEMA urgent please

Ok, if he wants to buy GBP, he'll get 10000/2.3326 = 4287.06....

Hi Dhiraj, Thanks for reply. Please note GBP is his local currency & the quote which given is indirect quote. and in London always using indirect quote. Is there any impact for this. If you don't mind,check the Nov-09 RTP first problem(swap). They have taken 2.3295 please. next week i have to attend the exam. I totally confused..Please....

answer will be 10,000/2.3295 =4292.767

Hi Manmohan, could you please explain how it is....

always use a simple trick

 

 

if rate is given

 

currency A / currency B = X / Y

 

then

if you want to buy currency B (i.e. sell currency A) use the ask rate(i.e the right one )Y in our case .

 

and if you want to buy currency A (i.e. sell currency B) use the bid rate (i.e the left one ) X in our case .

 

 

in your case rate given is GBP/CHF 2.3295 - 2.3326 and you want to buy GBP use the left rate i.e. 2.3295

 

this rule is applicable in all cases in entire forex chapter

 

 

 

 

 

 

 

Hi Manmohan, that means we don't need to check quote is direct /indirect right? But still i have a doubt. see the May 2010 MAFA RTP. Pro No-4 Here,London based co has to buy USD. the quote is $1.5455 - 1.5609 that means GBP/USD = 1.5455-15609 . We need to buy USD so as per our trick, the rate is 1.5609 . But in the solution they have taken 1.5455 ? Why?... please help me

Hi Lakshmi,

If the equation is given wihout equal to sign as per ur ist query :-exchange rates are: GBP/CHF 2.3295 - 2.3326

that means 1CHF=GBP 2.3295-2.23326  i.e GBP per CHF

and here we have to buy GBP so sell CHF using rate 2.3295

If equation had been given with eual to (=) sign like GBP/CHF = 2.3295 - 2.3326

then GBP =CHF 2.3295-2.3326

As far as ur 2nd query is concerned :-the quote is $1.5455 - 1.5609 i.e that means 1GBP =$1.5455-1.5609. we have to buy $ or we can say we have to sell GBP and rate will be 1.5455
.

We uses buy/sell rates by looking whether we have to buy unit currency or sell. Here unit currency is GBP. You are using buying rate for $ which u can use only after converting $ into unit currency i.e 1$ = GBP1/1.5609-1/1.5455.

Thanks Hardeep.Now it is clear. Thanks a lot... Thank you all..