Find the no-arbitrage cross exchange rate.The dollar-euro exchange rate is quoted as $1.60 = €1.00 and the dollar-yen exchange rate is quoted at $1.00 = ¥120.

Question

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To find the no-arbitrage cross exchange rate between the euro and the yen, we use the given exchange rates. First, convert $1.60 to euros, which equals €1.00. Then, since $1.00 equals ¥120, we can say that €1.00 (equivalent to $1.60) equals ¥120. Therefore, €1.00 is equivalent to ¥120, or dividing both sides by 100 gives €1.00/¥120 = €1/¥120 = €0.00833/¥1.00, which is the same as €1.00 = ¥120.00, or when simplified to the format asked, it's €192/¥1.00.

Find the No-Arbitrage Cross Exchange Rate