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Assuming that exchange rates are consistent across currencies, then if the Canadian dollar exchange rate with...

Assuming that exchange rates are consistent across currencies, then if the Canadian dollar exchange rate with the US dollar and the US dollar exchange rate with the Euro are both equal to 1.18, then the Canadian dollar exchange rate with the Euro is equal to 1.00.

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Answer #1

FALSE.

CAD/USD Exchange rate = 1.18

USD/Euro Exchange rate = 1.18

Therefore,

CAD/Euro Cross-rate = (CAD/USD Exchange rate) x (USD/Euro Exchange rate) = 1.18 x 1.18 = 1.3924 \neq 1

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