Cross rate table. Introduction: Exchange Rate: The exchange rate is the rate in which price of a country currency is measured in the term of other country’s currency. There are two methods of calculating the exchange rate direct and indirect. Direct exchange method: One unit price of the foreign currency is defined in term of domestic currency. Indirect method: One unit price of the domestic currency is defined in term of the foreign currency. Cross rate: Currency exchange rate of two countries which can be calculated with the help of third country’s currency is called cross rate.

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Chapter 17, Problem 2DQ

Summary Introduction

To prepare: Cross rate table.

Introduction:

Exchange Rate:

The exchange rate is the rate in which price of a country currency is measured in the term of other country’s currency. There are two methods of calculating the exchange rate direct and indirect.

Direct exchange method: One unit price of the foreign currency is defined in term of domestic currency.

Indirect method: One unit price of the domestic currency is defined in term of the foreign currency.

Cross rate:

Currency exchange rate of two countries which can be calculated with the help of third country’s currency is called cross rate.

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