Question

A New York bank quotes an MNC the following rates for the euro:

Bid Ask
$1.0746/€ $1.0924/€
If the MNC wants to sell $120 million, how much will it receive in euros?

Answer 1

Upon selling $120 million at the bid price of $1.0746/€, the MNC will receive approximately €111.61 million.

Step-by-step explanation:

The Multinational Corporation (MNC) looking to sell $120 million will have to use the bid price quoted by the New York bank, which is $1.0746/€. To calculate the amount it will receive in euros, the MNC needs to divide the amount of U.S. dollars it wants to sell by the bid price:

$120,000,000 ÷ $1.0746/€ = €111,609,205.03.

Therefore, upon selling $120 million, the MNC will receive approximately €111.61 million.