Foreign Exchange Spot Market Solution Spot transaction Market

Foreign Exchange Spot Market Solution : Spot transaction Market Taker - Spot rate USD/JPY Bid/Ask 115. 50/115. 55 USD is the Base Currency/ JPY is the Variable Currency 1/ You would like to Sell 1, 000 USD - Which price (Bid/Ask) do you choose to deal? Bid 115. 50 – You are selling the Base Currency. - What will be the countervalue in JPY? - 1, 000 USD * 115. 50 = + 115, 500, 000 JPY 2/ You would like to Buy 100, 000 JPY - Wich price (Bid/Ask) do you choose to deal? Bid 115. 50 - You are buying the Variable Currency - What will be the countervalue in USD? + 100, 000 / 115. 50 = - 865, 800. 87 USD IMAFA - FX SPOT EXERCISE CORRECTION 3 1

Foreign Exchange Spot Market Solution : Spot transaction Market Taker - Spot rate USD/JPY Bid/Ask 115. 50 / 115. 55 USD is the Base Currency/ JPY is the Variable Currency 3/ You would like to Buy 1. 000 USD - Which price (Bid/Ask) do you choose to deal? Ask 115. 55 – You are buying the Base Currency - What will be the countervalue in JPY? + 1, 000 USD * 115. 55 = - 115, 550, 000 JPY 4/ You would like to Sell 100, 000 - Which price (Bid/Ask) do you choose to deal? Ask 115. 55 – You are selling the Variable Currency - What will be the countervalue in USD? - 100, 000 / 115. 55 = + 865, 426. 22 USD BBA EDHEC International Treasury Management 2

Foreign Exchange Spot Market Solution : Spot transaction Flows Market Taker- Spot rate USD/JPY Bid/Ask 115. 50 / 115. 55 USD is the Base Currency/ JPY is the Variable Currency 1/ You would like to Sell 1, 000 USD - Outflow in USD - Inflow in JPY - 1, 000 USD Sale + 115, 500, 000 JPY Purchase 2/ You would like to Buy 100, 000 - Inflow in JPY - Outflow in USD + 100, 000 JPY Purchase - 865, 800. 87 USD Sale 3/ You would like to Buy 1, 000 USD - Inflow in USD – Outflow in JPY + 1, 000 USD Purchase - 115, 550, 000 JPY Sale 4/ You would like to Sell 100, 000 JPY - Outflow in JPY – Inflow in USD - 100, 000 JPY Sale + 865, 426. 22 USD Purchase BBA EDHEC International Treasury Management 3