Suppose the exchange value of the British pound is $2 per pound while the exchange value of the Swiss franc is 50 cents per pound.The cross-exchange rate between the pound and the franc is
A) 1 franc per pound.
B) 2 francs per pound.
C) 3 francs per pound.
D) 4 francs per pound.

Question

Quizplus · Accepted Answer

To find the cross-exchange rate between the pound and the franc, we need to determine how many francs equal one pound. Since 1 pound is $2 and 1 franc is 50 cents (or $0.50), it takes 4 francs to equal $2 (since $2/$0.50 = 4). Therefore, the cross-exchange rate is 4 francs per pound.

Suppose the Exchange Value of the British Pound Is $2