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Answer: EUR/CNY is 7.1275/7.1293 (base/quote is bid/ask)
The cross rate is obtained by multiplying the EUR/USD bid and ask by the USD/CNY bid and ask, respectively. - **Cross bid** = EUR/USD bid × USD/CNY bid - **Cross ask** = EUR/USD ask × USD/CNY ask Using the market quotes implied in the question, the EUR/CNY cross rate is **7.1275/7.1293**, so **option C** is correct.
Author: Manit Arora
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Source is Yahoo! Finance (http://finance.yahoo.com). Please note that both of the above are given in the base/quote format, which is typical; e.g., "The first currency that is quoted in a currency pair is known as the base currency and the second is known as the counter currency," The Little Book of Currency Trading: How to Make Big Profits in the World of Forex, p. 36. Wiley. Kindle Edition. Therefore, in EUR/USD, the base currency is EUR, and the quote (aka, price, counter) currency is USD, while in USD/CNY, the base currency is USD, and the quote currency is CNY.
What is the market-implied bid-ask on the EUR/CNY cross rate?
A
EUR/CNY is 0.1741/0.1741 (base/quote is bid/ask)
B
EUR/CNY is 5.7428/5.7434 (base/quote is bid/ask)
C
EUR/CNY is 7.1275/7.1293 (base/quote is bid/ask)
D
EUR/CNY is 8.6261/8.6270 (base/quote is bid/ask)
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