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If AUD/USD is 0.7515/19 and EUR/USD is 1.1592/97, calculate the offer rate for AUD/EUR: Select one: a. 0.6480 b. 1.5417 c. 0.6484 d. 0.6486

Question

If AUD/USD is 0.7515/19 and EUR/USD is 1.1592/97, calculate the offer rate for AUD/EUR:

Select one:

  • a. 0.6480
  • b. 1.5417
  • c. 0.6484
  • d. 0.6486
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Solution

1. Break Down the Problem

To calculate the offer rate for AUD/EUR, we need to find the bid rate for EUR/USD and the offer rate for AUD/USD. The offer rate for AUD/EUR can be derived using the relationship between these currency pairs.

2. Relevant Concepts

  • AUD/EUR can be calculated using the formula: AUD/EUR=AUD/USDEUR/USD \text{AUD/EUR} = \frac{\text{AUD/USD}}{\text{EUR/USD}}
  • The offer rate for AUD/USD is given as 0.7519 (the higher value), and the bid rate for EUR/USD is 1.1592 (the lower value).

3. Analysis and Detail

We can apply the values:

  1. Offer Rate for AUD/USD (ask price) = 0.7519
  2. Bid Rate for EUR/USD (buy price) = 1.1592

Now, substitute the values into the formula:

AUD/EUR=0.75191.1592 \text{AUD/EUR} = \frac{0.7519}{1.1592}

Calculating the value:

AUD/EUR=0.6484 \text{AUD/EUR} = 0.6484

4. Verify and Summarize

We calculated the offer rate for AUD/EUR using the provided rates. The calculated value is consistent with the formula used.

Final Answer

The offer rate for AUD/EUR is 0.6484 (option c).

This problem has been solved

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