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25 November, 19:12

uppose you observe the following exchange rates: €1 = $1.50; £1 = $2.00. Calculate the euro-pound exchange rate. A. €1.25 = £1.00 B. £1.3333 = €1.00 C. €3.00 = £1 D. €1.3333 = £1.00

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  1. 25 November, 22:27
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    D. €1.3333 = £1.00

    Explanation:

    Suppose you observe the following exchange rates: €1 = $1.50; £1 = $2.00.

    That implies that the value of €1 is equivalent to 1.50/2.00 the value of £1, since €1 = $1.50; £1 = $2.00

    Therefore the value of €1 = £0.75

    Hence the value of £1 = €1 / £0.75 = €1.3333
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