These spot foreign exchange rates were reported on November 21, 2007.

The exchange rates indicate the number of U.S. dollars necessary to purchase one unit of the foreign currency.

a. From the perspective of a C.S. investor, are the preceding foreign-exchinge rates direct or indirect quotes?

b. How much of each of the toreign currencies is needed to buy one U.S. dollar?

c. Calculate the theoretical cross rates between:

(1) the Australian dollar and the Japanese yen,

(2) the Australian dollar and the British pound,

(3) the Japanese ven and the British pound.

Transcribed Image Text:

Japanese British Yen Pound 2.0654 U.S. Dollars 0.009218 Australian Dollar 0.8709