December-20I8
Please work out the buying rate of euro 60,000 against an export bill with a usance period of 180 days on the basis of the following data :-
US$ 1 = Tk. 83.5010-83.6010
Euro £ 1 = US$ 1.3040-1.4050
• Transit period 15 days
• Rate of Interest 9% per annum
• Profit margin Tk.1I25%
• One year = 360 Days
Rough calculations to be shown.
Solution:
Euro £ 1 = US$ 1.3040-1.4050
US$ 1 = Tk. 83.5010-83.6010
In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is a Direct Exchange Rate. The maxim of Direct Exchange Rate is, "Buy Low, Sell High".
Therefore, the exchange rate ofUSD-BDT is to be-
So, £ 1 = US$ 1.3040-1.4050
Here, £ 1 = $ 1.3040* 1 USD
$ 1
= Tk. 83.5010
£ 1 = Tk. 1.3040*83.5010
=Tk. 108.8853
Exchange Margin:
Here, $1=Tk.83.5010
Here, Billing
Maturity Period
Total Time = Billing Maturity period+ Transit period= (180+ 15)= 195 days
Interest charge (For 195 days)= PRT/360*100
= Tk. (108.8853*9*195)/(360 *100)
= Tk. (191093.7015/36000)
= Tk. 5.3081
180
days &
Transit Period 15
Days
Profit margin = Tk 108.8853*1125%
= 435.54
Or = 0.0436
Total Exchange Margin = (Interest+ Profit margin)
= (5.3081+0.436)
= Tk. 5.7441
Exchange rate for £ 1
= Tk. 108.8853-5.7441
=Tk.103.1412(Ans.)
July-2018
The current market exchange rates are a s follows:
20
£ 1 = $ 1.3947 - 1.3957
$ 1 = Tk. 82.9020-82.9820
Please calculate the exchange rate of your bank for buying 120 days pound sterling usance bill assuming the following :-
• Transit period 10 days
• Rate of Interest 10% per annum
• Profit margin Tk.0.10 per pound sterling
• One year = 360 Days
Rough calculations to be shown.
Solution:
£ 1 = $ 1.3947 - 1.3957
$ 1 = Tk. 82.9020-82.9820
In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is a Direct Exchange Rate. The maxim of Direct Exchange Rate is, "Buy Low, Sell High". Therefore, the exchange rate ofUSD-BDT is to be-
So, £ 1 = $ 1.3947 - 1.3957
Here, £ 1 = $ 1.3947* 1 USD
$ 1
= Tk. 82.9020
£ 1 = Tk. 1.3947 * 82.9020
=Tk. 115.6234
Exchange Margin:
Here, $1=Tk.82.9020
Here,
Billing
Maturity
Period
Total Time = Billing Maturity period+ Transit period= (120+ 10)= 130 days
Interest charge
(For 130 days)= PRT/360*100
= Tk. (115.6234*10*130)/(360 *100)
= Tk. (150310.42/36000)
= Tk. 4.1752
120
days &
Transit Period 10
Days
Profit margin = Tk 0.10
Total Exchange Margin = (Interest+ Profit margin)
= (4.1752+0.10)
= Tk. 4.2752
Exchange rate for £ 1
= Tk. 115.6234
- 4.2752
=Tk.lll.3482(Ans.)
November 2017
Please calculate the exchange rate for buying a 120 day bill denominated in pound sterling using the following parameters
£ 1 = $ 1.4947 - 1.4957
$1 =Tk. 78.9020-78.10
• Transit period 10 days
• Interest rate 10% p.a
• Profit margin per pound sterling Tk. 0.10 (Assume 360 days a year.)
Solution:
Given, £ 1 = $ 1.4947 - 1.4957
$1 =Tk. 78.9020-78.10
In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is a Direct Exchange Rate. The maxim of Direct Exchange Rate is, "Buy Low, Sell High". Therefore, the exchange rate
ofUSD-BDT is to be-
So, £ 1 =$ 1.4947
$1 =Tk. 78.10
£
1 = Tk. 1.4947 * 78.10
=Tk. 116.7360
Exchange Margin:
Total Time = Billing Maturity period+ Transit period= (120+ 10)= 130 days
Interest charge (For 130 days)
= Tk. (116.7360 * 130 * 10)/(360 *100)
= Tk. (151756.80/36000)
= Tk. 4.2154
Here, $1=Tk.78.10
Here, Billing
Maturity Period
120
days &
Transit Period 10
Days
Profit
Margin = Tk 0.10
Total Exchange Margin
= (Interest+ Profit margin)
= (4.2154+0.10)
= Tk. 4.3154
Exchange rate for £1 = Tk. 116.7360 - 4.3154
= Tk.112.4206 (Ans)
June-2017
Please calculate the exchange rate of your
bank
for
buying 120 days usance export bill denominated in pound sterling on the basis of the following data.
~ Pound sterling 1 = US Dollar 1.4947-1.4957
~ US Dollar 1= TK 65.7550-65.7600
• Transit period 15 days
• Rate of Interest 10% per annum
• Profit margin Tk.0.10 per pound sterling
• One year = 360 Days
Rough calculations to be shown.
Solution:
£ 1 = $ 1.4947-1.4957
$ 1 = TK 65.7550-65.7600
In
case of USD-BDT exchange rate, domestic currency
(BDT) is flexible and foreign
currency (USD) is fixed. So, USD-BDT rate is a Direct Exchange Rate. The maxim of Direct Exchange
Rate is, "Buy Low, Sell High". Therefore, the exchange rate ofUSD-BDT is to
be-
So, £ 1 = $ 1.4947 - 1.4957
Here, £ 1 = $ 1.4947* 1 USD
$ 1
= Tk. 65.7550
£ 1 = Tk. 1.4947 * 65.7550
=Tk. 98.2840
Exchange Margin:
Here, $1=Tk.65.7550
Here, Billing
Maturity
Period
Total Time = Billing
Maturity period+ Transit period= (120+ 15)= 135 days
Interest charge (For 135 days)= PRT/360* 100
= Tk. (98.2840*10*135)/(360 *100)
= Tk. (132683.40/36000)
= Tk. 3.6857
120 days &
Transit Period 10
Days
Profit
margin = Tk 0.10
Total Exchange Margin = (Interest+ Profit
margin)
= (3.6857+0.10)
= Tk. 3.7857
Exchange rate for £ 1
= Tk. 98.2840 - 3.7857
=Tk.94.4983(Ans.)
November-2016
Please calculate the exchange rate for buying a usance export bill
denominated in pound sterling
65000
on the basis ofthe following data.
);> Pound sterling 1 = US Dollar 1.3947-1.3957
);> US Dollar 1= TK 78.50-78.70
• Transit period
10 days
• Profit margin Tk.1I16%
• Postage 1/32%
• One year = 360 Days
Rough calculations to be shown.
Solution:
£ 1 = $ 1.3947-1.3957
$ 1 = TK 78.50-78.70
In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is a Direct Exchange Rate. The maxim of Direct Exchange Rate is, "Buy Low, Sell High". Therefore, the exchange rate ofUSD-BDT is to be-
So, £ 1 = $ 1.3947 - 1.3957
Here, £ 1 = $ 1.3947* 1 USD
$ 1 = Tk. 78.50
£ 1 = Tk. 1.3947 * 78.50
=Tk. 109.4839
Exchange Margin:
Transit period=
10 days
Interest charge (For 10 days)= PRT/360*100
Here, $1=Tk.78.50
Here,Transit
Period 10 Days
|
|
= Tk. (109.4839*10)/(360 = Tk. (1094.839/36000) |
*100) |
|
|
= Tk.
0.03041 |
|
||
|
Profit margin |
|
= Tk
109.4839*1/16% = 684.27 |
|
|
|
Or |
= 0.684 |
|
|
Postage |
|
= Tk
109.4839*1/32% = 342.13 |
|
|
|
Or |
= 0.342 |
|
Total Exchange Margin
Exchange rate for £ 1
= (Interest+ Profit margin+Postage)
= (0.03041 +0.684+0.342)
= Tk. 1.0564
= Tk. 109.4839
- 1.0564
=Tk.108.4275
Amount to be credited to the
Customer Account =(65000*108.4275)
= 70,47,787.50 (Ans.)
May-2016
Please calculate the buying rate of pound sterling of your bank using the following data:-
• Tenor of the bill 60 days sight
• Transit time 10 days
• Interest rate 12% p.a
• Banks profit margin 0.10 per pound
• Overhead
expenses
0.05 per pound
• Prevailing Exchange rate
£ 1 = $ 1.5500 - 1.5600
$ 1
= Tk. 78.5040-78.7080
(Assume 360 days a year.)
Solution:
Given, £ 1 = $ 1.5500 - 1.5600
$ 1 = Tk. 78.5040-78.7080
In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is a Direct Exchange Rate. The maxim of Direct Exchange Rate is, "Buy Low, Sell High". Therefore, the exchange rate ofUSD-BDT is to be-
So, £ 1 =$ 1.5500
$1 = Tk. 78.5040
£ 1 = Tk. 1.5500 * 78.5040
=Tk. 121.6812
Exchange Margin:
Here, $1=Tk.78.5040
Here, Billing
Maturity Period
Total Time = Billing Maturity period+ Transit period= (60+ 10)= 70 days
Interest charge
(For 70 days) = Tk. (121.6812 * 12 * 70)/(360 *100)
= Tk. (102212.208/36000)
= Tk. 2.8392
60 days &
Transit Period 10
Days
Profit Margin
Overhead expenses
= Tk 0.10
=Tk 0.05
Total Exchange Margin
= (Interest+ Profit margin+ Overhead Charge)
= (2.8392+0.10+0.05)
= Tk. 2.9892
Exchange rate for £1 = Tk. (121.6812-2.9892)
= Tk.118.692 (Ans)
Please use the following exchange rates and other parameters to work out the buying rate of your bank for purpose of euro denominated travelers cheques:-
a) £ 1 = $ 1.09-1.10
$ 1 = Tk. 77.5040-77.7080
b) Transit period 12 days c) Interest rate 9% p.a
d) Profit margin Tk. 0.10 per euro
e) Handaling Charge Tk.0.03 per euro
(Assume 360 days a year.)
Solution:
Given, £ 1 = $ 1.09-1.10
$ 1 = Tk. 77.5040-77.7080
In case of
USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is a Direct Exchange Rate. The maxim of Direct Exchange Rate is, "Buy Low, Sell High". Therefore, the exchange
rate ofUSD-BDT is to be-
So, £ 1 =$ 1.09
$1 = Tk. 77.5040
£
1 = Tk. 1.09 * 77.5040
=Tk. 84.4794
Exchange Margin:
Transit period= 12 days
Here, $1=Tk.77.5040
Here,Transit
Period 12 Days
Interest charge (For 12 days) = Tk. (84.4794 * 12 * 9)/(360 *100)
= Tk. (9123.7708/36000)
= Tk. 0.2534
Profit Margin
Handling Charge
= Tk 0.10
= Tk. 0.03
Total Exchange Margin
= (Interest+ Profit
margin+ handling charge)
= (0.2534+0.10+0.03)
= Tk. 0.3834
Exchange rate for £1 = Tk. 84.4794-0.3834
= Tk.84.096 (Ans)
Please work out the buying rate of 120 days export bills denominated in pound sterling using the following data:-
a) £ 1 = $ 1.4947 - 1.4957
$1 =Tk. 78.9020-78.10
b) Transit period 10 days c) Interest rate 10% p.a
d) Profit margin per pound sterling Tk. 0.10 (Assume 360 days a year.)
Solution:
Given, £ 1 = $ 1.4917 - 1.4957
$ 1 = Tk. 76.5040-76.7080
In case of USD-BDT exchange rate, domestic currency
(BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is a Direct Exchange Rate. The maxim of Direct Exchange Rate is, "Buy Low, Sell
High". Therefore, the exchange rate ofUSD-BDT is to be-
So, £ 1 =$ 1.4917
$1 = Tk. 76.5040
£ 1 = Tk. 1.4917 * 76.5040
=Tk. 114.1210
Exchange Margin:
Here, $1=Tk.76.5040
Here, Billing
Maturity Period
Total Time = Billing
Maturity period+ Transit period= (120+ 10)= 130 days
Interest charge
(For 130 days) = Tk. (114.1210 * 130 * 10)/(360 *100)
= Tk. (148357.3/36000)
= Tk. 4.1210
120
days &
Transit Period 10
Days
Profit
Margin = Tk 0.10
Total Exchange Margin
= (Interest+ Profit margin)
= (4.1210+0.10)
= Tk. 4.2210
Exchange rate for £1 = Tk. 114.1210 - 4.2210
= Tk.l09.900 (Ans)
November-2010 (Q-7)
An exporter has presented an export bill for Euro 50,000 for negotiation on your bank. By using the following particulars, determine the Euro exchange rate of your
bank to purchase the export bill and also determine what amount will be credited to the exporter's account
:-
(a) Bill amount- Euro 50,000 (b) Bill Period- 60 days
(c) Transit Period- 10 days
(d) Interest Rate- 5%(Annually)
(e) Profit
Margin- BDT 0.10 per Euro
(f) Postage Charge- 1/32%
(g) Existing Exchange Rate:
Euro 1 = USD 1.2215-1.2212
USD 1 = BDT 68.5800-68.5000
(360 days per year is to be considered for calculation.)
Solution:
Given Exchange Rate
Euro 1 = USD 1.2215-1.2212
USD 1 = BDT 68.5800-68.5000
In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is a Direct Exchange Rate. The maxim of Direct Exchange Rate is, "Buy Low, Sell High". Therefore, the exchange rate ofUSD-BDT is to be-
USD 1 = BDT 68.5000
It is assumed that local dealer bank will collect
the Euro and sell the Euro in order to buy USD from international Money Market. International dealer will purchase Euro in exchange of less amount
ofUSD. So, the Euro-USD exchange rate for local dealer bank is to be-
Euro 1 = USD 1.2212
Now, Euro 1 = 1.2212*1 USD
Euro 1 =
1.2212*68.5000 BDT [USD 1 =
BDT 68.5000]
Euro 1 =
BDT 83.6522
Calculation of Exchange Margin:
Total Time = Bill Maturity Period + Transit Period =
(60+ 10) Days =
70 Days
Interest
= BDT 83.6522*5*701100*360= BDT 0.8133
Profit Margin (Per Euro) = BDT 0.1000
Postage
Charge = BDT (83.6522*1)/(32*100) = BDT 0.0261
Total Exchange Margin = BDT (0.8133+0.1000+0.0261) = BDT 0.9394
In case of purchase, Local Dealer Bank will realize expenses from the client during calculation of exchange rate for the client. Local dealer bank will provide less amount of BDT to the client in exchange of Euro. That is, during calculation of exchange rate for the client, the amount of total exchange margin has to be deducted from the exchange rate.
So, Euro 1 = BDT (83.6522
- 0.9394) =
BDT 82.7182
Therefore, for purchasing
of export bill local dealer bank will credit the exporter's account by
BDT (50,000*82.7182) = BDT 41,35,640.00