Question

# Assume the foreign exchange rate quotes are such that \$1 is equal to 1.0428 units of...

Assume the foreign exchange rate quotes are such that \$1 is equal to 1.0428 units of Australian dollars and 0.7572 units of Euros. Also, those quotes can be expressed as Australian dollars 1.0428/\$ and Euros 0.7572/\$. How many Euros is needed to buy 1 unit of Australian dollar?

a. Euros 0.7262/Australian dollars

b. Australian dollars 6.6262/Euro

c. Australian dollars 1.3771/Euro

d. none of the answers is correct

e. Euros 4.5738/Australian dollar

 \$ 1 = Aust \$ 1.0428 \$ 1 = €                0.7572 Now we want the rate of 1 Aust \$ against Euro, Calculation of these exchange rate is called cross rate So Euro need to buy the Aust \$ = Euro Rate against Dollar / Aust \$ rate against \$ So Euro need to buy the Aust \$ = 0.7572 "/" By 1.0428 So Euro need to buy the Aust \$ = 0.7261 So , We need 0.7261 Euro for buy one Australian Dollar So none of the answer is correct. Answer = Option D = none of the answers is correct

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