A major U.S. multinational firm has forecast the euro/dollar rate to be €1.10/$ one year hence, and an exchange rate of $1.40 for the British pound (£) in the same time period. What does this imply the company's expected rate for the euro per pound to be in one year?
A) €1.40/£
B) £1.40/€
C) £1.54/€
D) €1.54/£

Question

Quizplus · Accepted Answer

To find the expected rate of euro per pound (€/£), you divide the forecasted rate of the pound per dollar ($1.40/£) by the forecasted rate of the euro per dollar (€1.10/$). This gives €1.54/£.

A Major US