Suppose the exchange rate between U.S.dollars and Swiss francs is SF 1.41 = $1.00, and the exchange rate between the U.S.dollar and the euro is $1.00 = 1.64 euros.What is the cross-rate of Swiss francs to euros?
A) 0.43
B) 0.86
C) 1.41
D) 1.64
E) 2.27

Question

Quizplus · Accepted Answer

To calculate the cross-rate, we need to first convert the Swiss francs to U.S. dollars and then convert the U.S. dollars to euros.

1 Swiss franc = $1/1.41= $0.71
1 U.S. dollar = 1.64 euros

So, 1 Swiss franc = $0.71 = 0.71/1.64 euros = 0.432 euros

Therefore, the cross-rate of Swiss francs to euros is 0.43 (rounded to two decimal places). The best answer choice is B.

Suppose the Exchange Rate Between U