If the U.S. dollar-British pound exchange rate is $1.50 per pound, and the U.S.

ID: 2781214 • Letter: I

Question

If the U.S. dollar-British pound exchange rate is $1.50 per pound, and the U.S. dollar-euro rate is $0.50 per euro:

Instructions: Enter your response rounded to the nearest two decimal places.

a. What is the pound-per-euro rate?

£ per €

b. If the pound per euro rate were above this rate, you could profit by converting (Click to select) dollars to euros euros to pounds pounds to dollars , (Click to select) dollars to euros euros to pounds pounds to dollars , and then (Click to select) dollars to euros euros to pounds pounds to dollars . If the pound per euro rate were below this rate, you could make a profit by converting (Click to select) dollars to pounds pounds to euros euros to dollars , (Click to select) dollars to pounds pounds to euros euros to dollars , and then (Click to select) dollars to pounds pounds to euros euros to dollars .

Explanation / Answer

pound-per-euro = pound-per-USD * USD-per-euro

= 1/1.5*0.5 = 0.33

if pound-per-euro is above 0.33 you could profit by converting dollars to euros, euros to pounds, and then pounds to dollars

If pound-per-euro is below 0.33 you could profit by converting dollars to pounds, pounds to euros, and then euros to dollars

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If the U.S. dollar-British pound exchange rate is $1.50 per pound, and the U.S.

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Explanation / Answer

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