1. The currency trader's quotation of the USD/EUR exchange rate for the client has the following form: 1.1824/39 (bid/ask). 						
"At what rate, you as his client, will you sell EUR expressed in USD?"						
						
		bid	<	ask		(bid exchange rate has to be always lower than ask exchange rate)
USD/EUR		1.1824		1.1839		
						
		You will sell 1 EUR for the 1.1824 USD.				"(Trader buys => client sells at bid exchange rate)
"
##### Sheet/List 2 #####
2. The bank is quoting the following CZK bid and ask exchange rate. Calculate the bid and ask exchange rate for EUR (four decimal places).								
		bid		ask				
EUR/CZK		0.0375		0.0425				
								
								
								
CZK/EURBID=˃   				 =	1	 =	23.52941176	CZK/EUR
					"0,0425 EUR/CZK"			
								
CZK/EURASK=˃ 				 =	1	 =	26.66666667	CZK/EUR
					"0,0375 EUR/CZK"			
								
								
	Bid has to be lower than Ask!!!							
								
		BID	<	ASK				
CZK/EUR		23.52941176	<	26.66666667				
##### Sheet/List 3 #####
3. Bank's dealer is quoting the following EUR exchange rates. Calculate the  middle rate and the spread in absolute and percentage terms.										
										
USD/EUR		1.2758		1.2766						
										
										
										
										
middle rate		" = (1,2766 USD/EUR - 1,2758 USD/EUR)"				 =	1.2762	USD/EUR		
			2							
										
										
spred in absolute terms		"  = 1,2766 USD/EUR -1,2758 USD/EUR"				0.0008	 => 8 pips			
										
spread in %		" = (1,2766 USD/EUR - 1,2758 USD/EUR) *100"				 =	0.000626665	*100 =	0.0627%	
			"1,2766 USD/EUR"							
										
										
										
										
##### Sheet/List 4 #####
4. The exchange rate of the euro (EUR) in the basic and current periods is specified as follows. 										
Calculate the exchange rate of the Czech koruna (CZK) in both periods and the percentage change in the foreign exchange rate in both cases. 										
Determine which currency has been appreciated and which has been depreciated.										
										
										
E0	27.70	CZK/EUR								
E1	26.14	CZK/EUR								
										
										
										
										
										
										
Δ EUR:		" = (26,14 CZK/EUR-27,7 CZK/EUR)   ="				-0.05631769	 =>	Δ EUR in %:	-5.63%	
			"27,7 CZK/EUR"							
										
"Euro depreciated against Czech koruna by 5,63 %."										
										
										
 EUR/CZK exchange rate calculation:										
E0	" =1/27,7 CZK/EUR"		 =	0.036101	EUR/CZK					
E1	" =1/26,14 CZK/EUR"		 =	0.038256	EUR/CZK					
										
změna CZK:		" = (0,038256 EUR/CZK-0,036101 EUR/CZK)   ="				0.059678653	 =>	Δ CZK in %:	5.97%	
			"0,036101 EUR/CZK"							
										
"Czech koruna apreciated against Euro by 5,97 %."										
##### Sheet/List 5 #####
5. Škoda Auto company has expected income cash flows of 125 000 PLN from business in Poland. What are the expected cash flows in CZK?											
											
CZK/PLN		6.2175		6.3543		(we will sell the PLN to the dealer at bid exchange rate)					
											
											
Income cash flows in CZK		 =	"125 000 PLN x 6,2175 CZK"			 = 	777187.5	CZK			
				1 PLN							
											
											
											
											
											
											
											
##### Sheet/List 6 #####
6. Arcelor Mittal Tubular Products Karviná needs to buy 1 000 000 GBP to pay for the delivery. What will be the costs in CZK?							
							
							
CZK/GBP		29.8122		29.8538		(we will buy the GBP from the dealer at ask exchange rate)	
							
							
Costs in CZK	 = 	"1 000 000 GBP x 29,8538 CZK"			 = 	29853800	CZK
			1 GBP