Forums › ACCA Forums › ACCA FM Financial Management Forums › How do you work out spot rates using this format?
- This topic has 2 replies, 2 voices, and was last updated 13 years ago by londonacca.
- AuthorPosts
- December 2, 2010 at 12:54 am #46483
This is from the technical article on Foreign Currency Risk:
E/£ 1.2025 + – 0.03 giving spot rates 1.2028 – 1.2022But 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.
December 2, 2010 at 6:54 am #72304+,- 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.
December 2, 2010 at 7:06 am #72305Hi. 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 1.4784So, 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 1.4784Cheers
- AuthorPosts
- You must be logged in to reply to this topic.