Suppose exchange rates 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) 2.27
B) 1.41
C) 1.64
D) 0.43
E) 0.86

Question

Quizplus · Accepted Answer

To find the cross-rate of Swiss francs to euros, first convert 1 Swiss franc to U.S. dollars: 1 SF = 1/1.41 USD. Then convert that amount to euros using the USD to euro rate: (1/1.41) USD * 1.64 euros/USD = 1.64/1.41 euros. Simplifying gives approximately 0.86 euros per Swiss franc.

Suppose Exchange Rates Between U