Asked by Alessandro Godina on May 06, 2024
Verified
The direct quotes for euros and British pounds are $.90 and $1.50, respectively. What is the cross-rate between euros and pounds expressed in units of pounds per euro?
A) 13.50 pounds
B) 0.60 pounds
C) 1.35 pounds
D) 1.66 pounds
Cross-Rate
Refers to the exchange rate between two currencies calculated through their common exchange rates with a third currency.
Euros
The official currency of 19 out of the 27 European Union countries, which together comprise the Eurozone.
British Pounds
The currency of the United Kingdom, symbolized by £ and known as sterling, used throughout the UK and its territories.
- Gain insight into the structures and determinants that establish the values of foreign currencies.
Verified Answer
ZZ
Zaria ZepherinMay 11, 2024
Final Answer :
B
Explanation :
The cross-rate between euros and pounds can be calculated by dividing the direct quote for euros ($.90) by the direct quote for pounds ($1.50). This gives 0.90 / 1.50 = 0.60 pounds per euro.
Learning Objectives
- Gain insight into the structures and determinants that establish the values of foreign currencies.