Question: a) Given the following pair wise exchange rates: 1 = $1.1268, and 1 = $1.4571 (i) Calculate the cross-rate of euros per pound. (5 points)

a) Given the following pair wise exchange rates: 1 = $1.1268, and 1 = $1.4571

(i) Calculate the cross-rate of euros per pound. (5 points)

(ii) Calculate the cross-rate of pounds per euro. (5 points)

b) Suppose a few years ago, the exchange rate was $1.30/ and today the exchange rate is $ 1.10/:

(i) Calculate the percentage change in the value of the euro. (5 points)

(ii) Calculate the percentage change in the value of the US dollar. (5 points)

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