- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 8. Exchange Rate Calculations
- Subject 1. Cross-Rate Calculations
CFA Practice Question
An analyst is reviewing the following quotes from around the world:
In Tokyo: AU$1 (Australian Dollar) = ¥60
In Sidney: $1 = AU$2.3
In New York: $1 = ¥120
In Tokyo: AU$1 (Australian Dollar) = ¥60
In Sidney: $1 = AU$2.3
What is the true cross rate between the AU$ and the ¥?
A. AU$0.03245 per ¥
B. AU$0.01917 per ¥
C. ¥57.6543 per AU$
Explanation: Cross rate = (¥120/$1) / (AU$2.3/$1) = 52.174 Yen/AU$
Another way to express this quote is 1/(52.174 ¥/AU$) or AU$0.01917/¥.
User Contributed Comments 1
| User | Comment |
|---|---|
| zdenka88 | Or AU$2.3 / ¥120 = 0.01917 |