Question

2. If the Canadian dollar to U.S. dollar exchange rate is 1.05CAD/$ and the British pound to U.S. dollar exchange rate is 0.9pounds/$, what must be the Canadian dollar to British pound exchange rate?

Answer 1

Solution:-

Canadian dollar to US dollar exchange rate = 1.05

British pound to US dollar exchange rate = 0.09

So the spot exchange rate = 1.05 × (1 ÷ 0.9)

                                          = 1.05 * 1.111

                                          = 1.17 dollars per pound