The AUD/USD spot exchange rate is AUD1.60/USD and the CHF/USD is CHF1.25/USD. The AUD/CHF cross exchange...
The AUD/USD spot exchange rate is AUD1.60/USD and the CHF/USD is CHF1.25/USD. The AUD/CHF cross exchange rate is:
Select one:
a. 0.7813
b. 2.0000
c. 1.2800
d. 0.3500
Homework Answers
Answer is c. 1.2800
Now, per question
1 USD = 1.6 AUD
1 USD = 1.25 CHF
Equating both, it means
1.6 AUD = 1.25 CHF
=> 1 CHF = (1.6/1.25) AUD
=> 1 CHF = 1.28 AUD
Hence, cross exchange rate = 1.2800 AUD/CHF
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