Suppose you observe the following exchange rates: €1 = $1.50; ¥120 = $1.00.Calculate the euro-yen exchange rate.

Question

Quizplus · Accepted Answer

To calculate the euro-yen exchange rate, we need to first convert euro into dollars by using the given exchange rate of €1 = $1.50. Thus, €1 = $1.50. 
Next, we can use the given exchange rate of ¥120 = $1.00 to convert dollars into yen. Thus, $1 = ¥120. 
Combining these two conversion factors, we can find the euro-yen exchange rate:
€1 = $1.50 = ¥180 ($1.50 x ¥120)
Therefore, ¥1 = €0.00556 (1/180), which can be simplified to ¥1 = €0.0056 or €1 = ¥180. The correct answer is B.

Suppose You Observe the Following Exchange Rates: €1 = $1