Given these two exchange rates, $1 = 1.3254 Australian dollars and $1 = £0.5233, compute the cross rate between the Australian dollars and the pound. State this exchange rate in Australian dollars and in pounds.

Question

Quizplus · Accepted Answer

To find the cross rate between Australian dollars and pounds, divide the rate of Australian dollars per US dollar by the rate of pounds per US dollar. This gives: 1.3254 / 0.5233 = 2.5329 Australian dollars per pound. The inverse, 1 / 2.5329 = 0.3948 pounds per Australian dollar.

Given These Two Exchange Rates, $1 = 1