BFF/B1001 eExam Additional practice question

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BFF/B1001 eExam Additional practice question

Foreign Exchange

Additional Practice Question

You have just landed at Changi airport in Singapore, ready to embark on the first leg of your   South East Asia holiday. Having arrived from Australia, you have AUD 5,000, that you wish to exchange into the local currency. You compare the exchange rates of the following airport dealers which deal in the following currencies: SGD = Singapore Dollar, MYR = Malaysian Ringgit, THB = Thai Baht

Part A

Trying to jog your memory about what you learned about foreign exchange in BFF1001, you focus on the rates of 888 FX and recall that:

a.   What is the commodity currency? (1mark)

b.   What is the term currency? (1mark)

c.   Being in Singapore is this a direct or indirect quote? (1mark)

Part B

You are trying to find the best dealer to convert your AUD into SGD

a.   What rate will you deal at if using SuperRich? (1mark)

b.   What rate will you deal at if using 888? (1mark)

c.   What rate will you deal at if using CheapCheap? (1mark)

d.   Which is the best dealer to use? (1mark)

e.   How much SGD will you get? (1mark)

Part C

After a fun 7 days in Singapore, you are planning to go to Thailand next. You have SGD

3,200 left and are back at Changi Airport, ready to fly to Bangkok. Going back to the same airport dealers, the rates have not changed. To get Thai Baht with the SGD that you have,   you’ll need to change your money back into AUD first, then change it into THB.

a.   Which dealer offers the best rate from SGD to AUD and how much AUD will you get? (3marks)

b.   Which dealer offers the best rate from AUD to THB and how much THB will you get? (3marks)