The solutions manual is completing violating the up the bid down the ask rule I think the answer should be B but they say C, can someone check and see what they think?
essentialy, I would use the $0.02874 / NT bid whereas they are using the $0.02876 ask, and I would also use the $0.008856 / ¥ ask while they are using the 0.008852 bid
Does anyone agree?
Someone hook me up with an answer
Given:
USD/TWD = 0.02874-6
USD/JPY = 0.008852-56
We want TWD/JPY rates
Inverse one of the rates to make calculaion of the TWD/JPY cross rate simpler (IMO):
TWD/USD = 34.77051-34.79471
So now just multiply bid x bid and ask x ask, TWD/JPY = 0.30779-814
TWD10mm = JPY * 0.30779 (go long TWD, up the bid)
Simple algebra gives JPY32,489,684