Answer :
Final answer:
The direct quote for the pound in Zurich can be calculated using the cross rate formula. Using the given information for pound Sterling and Swiss franc quotes, the direct quote for the pound in Zurich would be approximately $0.8674-$0.8676.
Explanation:
The direct quote for the pound in Zurich can be calculated using the cross rate formula. The cross rate is the exchange rate between two currencies calculated through the exchange rates of those currencies and a third currency. In this case, the direct quote for the pound in Zurich can be calculated using the exchange rates of the pound in dollars and the Swiss franc in dollars.
The bid price in Zurich would be the reciprocal of the ask price for the pound Sterling in dollars divided by the ask price for the Swiss franc in dollars. Similarly, the ask price in Zurich would be the reciprocal of the bid price for the pound Sterling in dollars divided by the bid price for the Swiss franc in dollars.
Using the given information for pound Sterling and Swiss franc quotes, the direct quote for the pound in Zurich would be approximately $0.8674-$0.8676.
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