Given these two exchange rates, $1 = 12.5 Mexican peso and $1 = €0.75, compute the cross-rate between the Mexican peso and the euro. State this exchange rate in pesos.

Question

Quizplus · Accepted Answer

To find the cross-rate between the Mexican peso and the euro, we first need to understand how many euros one can get for one dollar, and then how many pesos one can get for one dollar. Given $1 = €0.75 and $1 = 12.5 Mexican pesos, we can calculate the cross-rate by dividing the amount in pesos by the amount in euros to find out how many pesos one euro can get. So, 12.5 pesos / 0.75 euro = 16.67 pesos per euro.

Given These Two Exchange Rates, $1 = 12