Question

Assume that the bank's bid quote of Mexican peso is $.099 and ask price is $.101. If you have Mexican pesos, what is the amountof pesos that you need to purchase $500,000?

Answer 1

To purchase $500,000, you will need approximately 4,950,495 Mexican pesos.

Step-by-step explanation:

To find out the amount of Mexican pesos needed to purchase $500,000, we need to determine the exchange rate between the two currencies.

The bid quote is the rate at which the bank is willing to buy Mexican pesos, and the ask price is the rate at which the bank is willing to sell Mexican pesos. In this case, the bid quote is $0.099 and the ask price is $0.101.

To convert $500,000 to Mexican pesos, we can use the ask price as it represents the rate at which we can sell Mexican pesos and receive dollars. Therefore, the amount of Mexican pesos needed is:

$500,000 / $0.101 = 4,950,495 pesos (rounded to the nearest whole number).