"""Create an educational video to explain the CFA Level 1 knowledge: Currency cross-rates calculation 🎓 Content Requirements: Start with a clear, beginner-friendly definition of the concept Explain the core components and logic step by step Include simple numerical examples or visual analogies Add a short summary or key takeaways at the end Ensure the structure follows a logical teaching flow from concept to application 🎨 Visual and Layout Requirements: Full-screen visuals with centered, readable content Use smooth animations to transition between steps or sections Highlight important terms, formulas, and keywords with bright accent colors (e.g., yellow, red, blue) Avoid text crowding or overlap; leave clear visual spacing Use animated icons, graphs, or diagrams where appropriate (e.g., timelines, flowcharts, charts) Minimize blank space; keep each screen visually rich and balanced 🗣️ Tone and Style: Friendly, clear, and professional Focus on making the topic accessible for first-time learners Avoid excessive jargon; use plain language wherever possible Maintain alignment with CFA curriculum terminology and scope"""

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Welcome to currency cross-rates! A cross-rate is simply an exchange rate between two currencies that doesn't involve the US Dollar. Instead of going through USD, we can calculate direct rates between currencies like Euro and British Pound. This is essential knowledge for CFA Level 1 candidates working in international finance. The cross-rate calculation method is straightforward. First, we need the exchange rates of both currencies against the US Dollar. Then we simply divide the first currency's USD rate by the second currency's USD rate. This mathematical operation eliminates the USD from both rates, giving us the direct cross-rate between the two currencies. Let's work through a practical example. Given that EUR/USD equals 1.2000 and GBP/USD equals 1.3500, we can calculate the EUR/GBP cross-rate. We divide 1.2000 by 1.3500, which gives us 0.8889. This means that one Euro is worth approximately 0.89 British Pounds. This calculation eliminates the US Dollar and gives us the direct exchange rate between Euro and Pound. Cross-rates have two important extensions. First, inverse rates: if EUR/GBP equals 0.8889, then GBP/EUR equals 1 divided by 0.8889, which is 1.1250. Second, bid-ask spreads apply to cross-rates too. For EUR/GBP, we use EUR/USD bid divided by GBP/USD ask for the cross-rate bid, and EUR/USD ask divided by GBP/USD bid for the cross-rate ask. This ensures proper spread calculation. Let's summarize the key takeaways for currency cross-rates. Remember the core formula: A over B equals A over USD divided by B over USD. Follow these quick steps: get both USD rates, divide the first by the second, apply bid-ask rules when needed, and calculate the inverse if required. Cross-rates are fundamental for CFA Level 1 success, so practice with different currency pairs to build confidence. You now have the tools to master this essential finance concept!