In this workout, we're told the current bid-ask on Euro US Dollar is 1.0780 to 1.0782. A trader believes the Euro will trade higher against the US Dollar and wants to trade 100 million Euros. Do they have to buy or sell US Dollars? And how many? Well, because it says they believe the Euro will trade higher and they want to trade a hundred million Euros, that means they're going to be buying Euros and they'll be selling US Dollars. Great. The units of Euros we're told it was 100 million, but now which exchange rate to use? And we've got two available to us. Well, they're going to be selling US Dollars and we have to ask ourselves the counterparty, are they going to charge them a low US Dollar figure or a high US Dollar figure? And of course, they're going to charge them a high US Dollar figure. Okay? So our trader will have to pay the higher of the two amounts. That means we're going to go for the second number here, the 1.0782.

So the US Dollar that's going to be paid, it's going to be the 100 million multiplied by the exchange rates, giving us 107,820,000 US Dollars. If we just check the other exchange rate that we could have used, the bid one, the US Dollar paid in this case would've been lower. So that's not quite right. We know that we're always going to be choosing the worst of the two exchange rates for us. So the answer 1.0782 meaning 107,820,000 US Dollars paid.