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Foreign exchange

Forums › ACCA Forums › ACCA AFM Advanced Financial Management Forums › Foreign exchange

Viewing 4 posts - 1 through 4 (of 4 total)
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  • April 30, 2015 at 8:47 am #243352
    mwende1
    Member
    • Topics: 2
    • Replies: 4
    • ☆

    I have a problem with understanding Bid/Ask quotes……example
    spot SFr/pounds 2.3140-2.3210 if I have 750 pounds and I need to convert them to SFr to pay my fixed costs which rate should I use. and if I want to convert my SFr to ponds which rate do I use?

    April 30, 2015 at 10:27 am #243363
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54478
    • ☆☆☆☆☆

    If the company is buying the first quoted currency (in this example SFr) then you use the lower rate (2.3140).
    If the company is selling the first quoted currency (Sfr) then you use the higher rate (2.3210).

    I do suggest that you watch the free lectures. The first of the lectures on foreign exchange risk management spends time on which exchange rate to use (and why).

    May 4, 2015 at 2:37 pm #243998
    mwende1
    Member
    • Topics: 2
    • Replies: 4
    • ☆

    Thank you , will watch them……….in this case the pound is the local country currency

    May 4, 2015 at 4:06 pm #244024
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54478
    • ☆☆☆☆☆

    I know that pounds is the local currency. The quote is SFr/pounds – so the first one mentioned in the quote is SFr.

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