Question

Use the following chart to answer the next two questions.

6/1	6/2	6/3
£.625/$	$1.50/£	£.72/$
¥150/$	¥150/$	¥125/$
€1.25/$	€/$.80	$.90/€

How many euros would you receive for 100,000 pounds on 6/2? Round intermediate steps to four decimals and your final answer to two decimals.

Answer 1

There are no direct rates avaiable for pounds to euros conversion. We have to use multiple currencies and quotes to get our answer.

On 6/2 DOLLAR/ POUND is given by $1.50 / Pound .

Step1 : Sell Pounds and buy dollars @ 1.50 $/ Pounds

Dollars bought = 100000 * 1.5 = $150000

Step 2 : Sell Dollars and buy euros @ 0.80 euros / dollar

Euros recieved = 150000 * 0.8 = 120,000 Euros

We will recieve 120,000 Euros for 100000 pounds.

( Please note that the amounts are multiplied by the forex quotes as the currency of the amount and base currency of the quote is same)