If you buy GBP 2,000,000 against USD at 1.6020; GBP 1,000,000 at 1.6035 and GBP 3,000,000 at 1.6028, what is the average rate of your position?
A) 1.6035
B) 1.6027
C) 1.6030
D) 1.6023

Question

Quizplus · Accepted Answer

To find the average rate of the position, we need to calculate the total amount of GBP bought and the total cost in USD.

GBP 2,000,000 at 1.6020 = USD 3,204,000 
GBP 1,000,000 at 1.6035 = USD 1,603,500 
GBP 3,000,000 at 1.6028 = USD 4,808,400

Total GBP bought = GBP 6,000,000 
Total cost in USD = USD 9,616,900

Average rate = Total cost in USD / Total GBP bought 
= USD 9,616,900 / GBP 6,000,000 
= 1.60282

Therefore, the average rate of the position is 1.6028, which is closest to option B (1.6027).

If You Buy GBP 2,000,000 Against USD at 1