Suppose the spot direct quotes for the pound sterling and euro are $1.3981?89 and $.1230?33,respectively.What is the direct quote for the pound in Paris?

Question

Quizplus · Accepted Answer

To find the direct quote for the pound in Paris, we need to use the cross rate between the euro and pound sterling. 
Euro/pound cross rate = Euro/dollar rate divided by pound/dollar rate 
= 0.1230/0.8989 
= 0.1369 
Now, to find the direct quote for the pound in Paris, we multiply the euro/pound cross rate by the pound/dollar rate: 
0.1369 x 1.3981 
= 0.1919 
Therefore, the direct quote for the pound in Paris is €1.1919/£, which can be simplified to €1.1339-73/£.

Suppose the Spot Direct Quotes for the Pound Sterling and Euro