To calculate the cross-rate between Australian dollars (A$) and Swiss francs (SFr), we will use the given exchange rates for Swiss francs and Australian dollars against the US dollar (USD). The general formula for cross-rates is:

$\text{Cross rate} \, (A\$/SFr) = \frac{\text{A\$/USD}}{\text{SFr/USD}}$

We are given the following exchange rates:

• Swiss francs against USD (SFr/USD) = 1.5960 − 1.5970
• Australian dollars against USD (A$/USD) = 1.7225 − 1.7260

Now, let's compute the A$/SFr cross-rates for both the bid and ask prices:

1. Bid Price for A$/SFr:

• Bid price for A$/SFr = (Bid price of A$/USD) ÷ (Ask price of SFr/USD)
• Bid = $\frac{1.7225}{1.5970}$

2. Ask Price for A$/SFr:

• Ask price for A$/SFr = (Ask price of A$/USD) ÷ (Bid price of SFr/USD)
• Ask = $\frac{1.7260}{1.5960}$

Let me calculate these values for you.The cross-rate the bank would quote for A$/SFr is:

• Bid price: 1.0786 A$/SFr
• Ask price: 1.0815 A$/SFr

Would you like more details or have any further questions?

Here are 5 related questions you might find helpful:

1. How do cross-rates affect international trade?
2. What is the significance of the bid-ask spread in currency exchange?
3. How do exchange rates influence a company’s foreign earnings?
4. What factors determine the fluctuations in cross-currency rates?
5. How are exchange rates set by banks in different countries?

Tip: Understanding how bid and ask prices work in exchange rates is crucial for getting the best deal in currency conversion. Always aim to understand the spread!