Able to buy pounds at the bid rate and sell them at ask rate

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Reference no: EM131611568

If the GBP quote is USD 1.2772-87 answer the following questions and please provide formulae and show all workings.

a) If you converted $20,000 to GBP and then back to USD, what would be its value in USD?

b) If you are able to buy pounds at the bid rate and sell them at the ask rate, how many USD would you need to earn $1,750 on a round-trip transaction (buying GPD for USD and then selling the GPD for USD)?

Reference no: EM131611568

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