Suppose we have the following exchange rate quotes: a. Suppose you have pound 16

Question

Suppose we have the following exchange rate quotes: a. Suppose you have pound 160. This is worth $ . Therefore. you would rather have 160 British pounds . (Do not round intermediate calculations and round your answer to 2 decimal places (e.g., 32.16).) b. You still have pound 150. In Swiss francs, this is worth Fr ____________. Therefore, you would rather have 150 (Do not round intermediate calculations and round your answer to 2 decimal places (e.g., 32.16).) C. The cross-rate for Swiss francs in terms of British pounds is Fr / pound . The cross-rate for British pounds in terms of Swiss francs is pound / Fr . (Do not round intermediate calculations and round your answers to 4 decimal places (e.g., 32.1616).)

Explanation / Answer

a) Exchange rate between UK E and USD is 1.5708. That means each UK E will yield 1.5708 USD.

Therefore 150 UK E will yield = 150x1.5708

                                                         = 235.62 USD

b) Exchange rate between USD and Fr is 1.0694. That means 1 Fr will yield 1.0694 USD. Therefore, In UK E, 1 Fr will yield = 1.0694/1.5708 UK E

                                       = 0.6808

So 150 UKE converted into Fr = 150 x0.6808

                                                                =102.12

c) Cross rate is FR/UK E = 0.6808 and UK E/ FR is 1/0.6808 = 1.4688

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.