econ

CFA Level II
#1

Assume that the EUR:USD six-month forward exchange rate is quoted at 1.2102/1.2112. What is the bid-ask spread as a percentage of the ask price based on a direct quote for euros? A) 0.0847%. B) 0.0848%. C) 0.0826%.

#2

C. Direct quote is inverse, so bid = 1/1.2112, and ask = 1/1.2102 (ask - bid)/ ask = 0.0823%. C is closest.

#3

0.8256274 - 0.826309 0.08248730196% = C?

#4

A?

#5

This is that question where the answer depends on the number of decimal places. If using 4 decimal places, then its choice A, else its C.

#6

ans is A. Rough question.

#7

stupid question

#8

I just did it like an ROR calc and got C right on the head… (12102/12112) - 1 = .000826

#9

That is the direct quote for USD. You need the direct quote for EUR.

#10

oh no, not again. Where did you get this question from QuantJock? EUR:USD = 1.2102/1.2112 is a direct quote for the EUR. From wherever you got this question, they are just as confused as some on this board.

#11

QuantJock how did you get A? What ever i do am getting C

#12

Dreary Wrote: ------------------------------------------------------- > oh no, not again. Where did you get this question > from QuantJock? > > EUR:USD = 1.2102/1.2112 > > is a direct quote for the EUR. From wherever you > got this question, they are just as confused as > some on this board. Isn’t that a direct quote for USD, USD/EUR would be 1.2102/1 or 1.2112/1? A direct EUR quote should be USD:EUR, right?

#13

This is a qbank question. I had some trouble with it. I’ll seei if I can pull it up again

#14

0.8256274769_ Bid 0.8263097009_ Ask 0.0006822240_ Spread 0.0008263097_ Ratio What am I doing wrong . . I don’t get it how do you calculate for A?

#15

I get C also, wouldnt worry about it as I think this is a qbank crap question, when stuff gets down to the 6th decimal place they can bl0w me.

#16

try this: 0.8256_ Bid 0.8263_ Ask 0.0007_ Spread = A

#17

newsuper Wrote: ------------------------------------------------------- > try this: > > 0.8256_ Bid > 0.8263_ Ask > 0.0007_ Spread > = A I agree

#18

I only got A because I was using my old HP10B to work this one out and it cut me off at 4 decimal places with no rounding This question is right up there in the Schweser Grand Hall of Fame of Crap Questions

#19

maybe CFAI should post up a recommended decimal place setting for calcs.

#20

Dreary v. swaption, part 2?