Question

5) (3 pts) Assume the direct exchange rate on the Euro is $1.123/1 Euro, and the direct exchange rate on the Australian dollar is US$0.663/1 AUD, what is the cross rate of the Euro with respect to Australian dollars. That is, how many AUD are equal one euro?

1. (2 pts) If the direct exchange rate on the Euro is trading at $1.094 / 1 EUR, how much would it cost to buy a widget from Germany for 60 Euros?

2. (2 pts) If the Euro strengthened to $1.134 / 1 EUR, how much would the same 60 Euro widget cost?

3. (2 pts)  If the Euro weakened to $1.062 / 1 EUR, how much would the same 60 Euro widget cost?

Answer 1