Question

7. Suppose the exchange rate between U.S. dollars and Swiss francs is $1.00 = 1.50 Swiss franc and the exchange rate between the U.S. dollar and the euro is $1.00 = 1.15 euros. What is the cross rate of the Swiss franc to the euro (SF/euro)?

Answer 1

1 dollar = 1.50 Swiss franc

and

1 dollar = 1.15 euros

So, 1.50 Swiss franc = 1.15 euros

1 Swiss franc = (1.15 / 1.50) euros

1 Swiss franc = 0.7667 euros

or 1 euro = 1 / 0.7667 = 1.304 Swiss franc

! euro = 1.304 Swiss franc

SF/euro = 0.7667