Problem 21-2 Using the Cross-Rate [LO1] Use the information below to answer the

Question

Problem 21-2 Using the Cross-Rate [LO1] Use the information below to answer the questions that follow. U.S. S EQUIVALENT CURRENCY PER U.S.$ U.K. Pound (E) Canada dollar 1.5763 1.0161 9842 Which would you rather have, $100 or £100? 100 Pounds Which would you rather have, $100 Canadian or £100? 100 Pounds What is the cross-rate for Canadian dollars in terms of British pounds? (Do not include the Canadian dollar sign, CS. Round your answer to 4 decimal places, e.g., 32.1616.) c$ What is the cross-rate for British pounds in terms of Canadian dollars? (Do not include the pound sign, £. Round your answer to 4 decimal places, e.g., 32.1616.)

Explanation / Answer

a)

1 USD = 1.5763 UK pound

Pound has higher value compared to USD, hence prefer 100 pounds

?b)

1 USD = 1.0161 Candainan $

1 USD = 1.5763 UK pound

1 Candainan $? = 1.5763 ?/ 1.0161 = 1.5513 UK pound

Pound has higher value compared to Candainan $? , hence prefer 100 pounds

c)

1 UK pound = 1.0161 ?/ 1.5763 ?= 0.6446 C$

d)

1 Candainan $? = 1.5763 ?/ 1.0161 = 1.5513 UK pound

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