| Use the information below to answer the questions that follow. (Enter your answer as directed, but do not round intermediate calculations.) |
| U.S. $ EQUIVALENT | CURRENCY PER U.S. $ | |
| U.K. Pound (£) | 1.5689 | .6374 |
| Canada dollar | 1.0191 | .9813 |
| Requirement 1: |
| Which would you rather have, $100 or £100? |
| (Click to select)100 Pounds100 Dollars |
| Requirement 2: | |
| Which would you rather have, $100 Canadian or £100? | |
| (Click to select)100 Canadian Dollars100 Pounds |
| Requirement 3: |
| (a) | What is the cross-rate for Canadian dollars in terms of British pounds? (Do not include the Canadian dollar sign (C$). Round your answer to 4 decimal places (e.g., 32.1616).) |
| Cross-rate | C$ / £ |
| (b) | What is the cross-rate for British pounds in terms of Canadian dollars? (Do not include the pound sign (£). Round your answer to 4 decimal places (e.g., 32.1616).) |
| Cross-rate | £ / C$ |
| ement 1: |
| Which would you rather have, $100 or £100? |
| Answer :•You would prefer £100, since: (£100)($1.5689/£1) = $63.74 |
| Requirement 2: |
| Which would you rather have, $100 Canadian or £100? |
| Answer :•You would still prefer £100. Using the $/£ exchange rate and the Canadian$/£exchange rate to find the amount of Canadian$ will buy, we get:
•(£100)($1.5689/£1)(Canadian $ .9813/$1) =canadial $ 64.95 |
| Requirement 3: |
| (a) What is the cross-rate for Canadian dollars in terms of British pounds? |
| Answer :
Using the amount given in the sum (£100)($1.5689/£1)/(Canadian $ .9813/$1) =canadial $ 1.5396 |
| Requirement 3: (b) |
| What is the cross-rate for British pounds in terms of Canadian dollars? |
| (£100)($1.5689/£1)(Canadian $ .9813/$1) =canadial $ 64.95/£100 = 0.6495 |
