Question

Use the information in Figure 211 to answer the following questions: a. £100 is worth (Round your answer to 2 decimal places, e.g. 32.16) b. £100 is worth SF Therefore, you would rather have (Round your answer to 4 decimal places, e.g., 32.1616) ces The c. The cross-rate for Swiss francs in terms of British pounds is SF£ cross-rate for British pounds in terms of Swiss francs is £/SF answers to 4 decimal places, e.g., 32.1616) (Round your

Answer 1

a. As per the rates given,

1 British Pound = 1.6893 $

100 British Pound = 100*1.6893 = 168.93 $

b. We know that,

100 British Pound = 168.93 $

$/Swiss Franc = 1.1373

This implies that 168.93 $ in SF will be = 168.93/1.1373 = 148.536

100 British Pound = 148.54 SF

c. Cross Rate (British Pound/Swiss Franc) = $/Swiss Franc * British Pound /$

The quotes given are $/ per unit of foreign currency

$/Swiss Franc = 1.1373

$/British Pound = 1.6893

British Pound/$ = 1/($/British Pound) = 1/1.6893 = 0.591961

Cross Rate (British Pound/Swiss Franc) = 1.1373 * 0.591961 = 0.673237

Cross Rate (British Pound/Swiss Franc) = 0.6732

Cross Rate (Swiss Franc/British Pound) = 1/ Cross Rate (British Pound/Swiss Franc) = 1/0.673237

= 1.48536

Cross Rate (Swiss Franc/British Pound) = 1.4854