Given these two exchange rates,$1 = 1.32 Australian dollars and $1 = £0.56,compute the cross-rate between the Australian dollar and the pound.State this exchange rate in Australian dollars and in pounds.

Question

Quizplus · Accepted Answer

To compute the cross-rate between the Australian dollar (AUD) and British Pound (GBP), we can use the following formula:

AUD/GBP = (AUD/USD) / (GBP/USD)

Substituting the given exchange rates, we get:

AUD/GBP = (1.32) / (0.56) = 2.36

This means that 1 Australian dollar is worth 2.36 British pounds, or 1 British pound is worth 0.42 Australian dollars.

Therefore, the answer is B) A$2.36.

Given These Two Exchange Rates,$1 = 1