How do you work out spot rates using this format?

Llondonacca15y ago

This is from the technical article on Foreign Currency Risk:
E/£ 1.2025 + - 0.03 giving spot rates 1.2028 - 1.2022

But what about this one: (This is the 'SDT' company question if you have the BPP kit)

Yen/ £ 199.887 + - 0.9 giving a rate of 200.032

What are the rules when the spots are given in this + - format?

Thanks in advance.

Mmkwadhwani15y ago#1

+,- format means you have to add it and then substract it from the single rate given in the question. then you get two rates that is sell and buy rate of currency.

Llondonacca15y ago#2

Hi. Yep, I understand that for the first one. But adding 0.9 to 199.887 gives 200.787 not 200.032

Expansion on the question:
How do you calculate these spot rates?
Yen/ £ 199.887 + - 0.9 giving a rate of 200.032
US$/ £ 1.7723 + - 0.0103 giving a rate of 1.7775
Euro/ £ 1.4708 + - 0.0105 giving a rate of 1.4784

So, when I add 1.7723 + 0.0103, I get 1.7826, not 1.7775
And when I add 1.4708 + 0.0105, I get 1.4813 not 1.4784

Cheers

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