The currency in which the cross-rates between two currency are stated Introduction: The price of a country’s currency that in terms of another nation’s currency is the exchange rate . The rate of exchange can be either floating or fixed. The two components of the exchange rates are the foreign currency and the domestic currency.

Question

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Answer 1

Question

Chapter 18, Problem 18.1C

Summary Introduction

To determine: The currency in which the cross-rates between two currency are stated

Introduction:

The price of a country’s currency that in terms of another nation’s currency is the exchange rate. The rate of exchange can be either floating or fixed. The two components of the exchange rates are the foreign currency and the domestic currency.

Expert Solution & Answer

Explanation of Solution

The cross rate is the implicit rate between two countries. Thus, the implicit rate between two countries that generally refers to the non-country U’s currencies quoted in some other third country currency and it is usually Country U’s dollars.

Conclusion

Country U’s dollars are the general quoted currency between two countries’ currencies because it mainly decreases the number of possible cross-currency quotes.

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Students have asked these similar questions

Discuss well about the exchange Rate Mechanisms of currencies; what does it mean “Independent Float” or “Pegged to another currency” mean? Give example for each.

Under the fixed exchange rate system, what was the currency against whichall other currency values were defined? Why?

What is meant by spot rate in case of foreign currency transaction?

Answer 2

Question

Chapter 18, Problem 18.1C

Summary Introduction

To determine: The currency in which the cross-rates between two currency are stated

Introduction:

The price of a country’s currency that in terms of another nation’s currency is the exchange rate. The rate of exchange can be either floating or fixed. The two components of the exchange rates are the foreign currency and the domestic currency.

Expert Solution & Answer

Explanation of Solution

The cross rate is the implicit rate between two countries. Thus, the implicit rate between two countries that generally refers to the non-country U’s currencies quoted in some other third country currency and it is usually Country U’s dollars.

Conclusion

Country U’s dollars are the general quoted currency between two countries’ currencies because it mainly decreases the number of possible cross-currency quotes.

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Answer 3

Question

Chapter 18, Problem 18.1C

Summary Introduction

To determine: The currency in which the cross-rates between two currency are stated

Introduction:

The price of a country’s currency that in terms of another nation’s currency is the exchange rate. The rate of exchange can be either floating or fixed. The two components of the exchange rates are the foreign currency and the domestic currency.

Expert Solution & Answer

Explanation of Solution

The cross rate is the implicit rate between two countries. Thus, the implicit rate between two countries that generally refers to the non-country U’s currencies quoted in some other third country currency and it is usually Country U’s dollars.

Conclusion

Country U’s dollars are the general quoted currency between two countries’ currencies because it mainly decreases the number of possible cross-currency quotes.

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Answer 4

Question

Chapter 18, Problem 18.1C

Summary Introduction

To determine: The currency in which the cross-rates between two currency are stated

Introduction:

The price of a country’s currency that in terms of another nation’s currency is the exchange rate. The rate of exchange can be either floating or fixed. The two components of the exchange rates are the foreign currency and the domestic currency.

Expert Solution & Answer

Explanation of Solution

The cross rate is the implicit rate between two countries. Thus, the implicit rate between two countries that generally refers to the non-country U’s currencies quoted in some other third country currency and it is usually Country U’s dollars.

Conclusion

Country U’s dollars are the general quoted currency between two countries’ currencies because it mainly decreases the number of possible cross-currency quotes.

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Answer 5

Chapter 18, Problem 18.1C

Summary Introduction

To determine: The currency in which the cross-rates between two currency are stated

Introduction:

The price of a country’s currency that in terms of another nation’s currency is the exchange rate. The rate of exchange can be either floating or fixed. The two components of the exchange rates are the foreign currency and the domestic currency.

Expert Solution & Answer

Explanation of Solution

The cross rate is the implicit rate between two countries. Thus, the implicit rate between two countries that generally refers to the non-country U’s currencies quoted in some other third country currency and it is usually Country U’s dollars.

Conclusion

Country U’s dollars are the general quoted currency between two countries’ currencies because it mainly decreases the number of possible cross-currency quotes.

Answer 6

Chapter 18, Problem 18.1C

Summary Introduction

To determine: The currency in which the cross-rates between two currency are stated

Introduction:

The price of a country’s currency that in terms of another nation’s currency is the exchange rate. The rate of exchange can be either floating or fixed. The two components of the exchange rates are the foreign currency and the domestic currency.

Expert Solution & Answer

Explanation of Solution

The cross rate is the implicit rate between two countries. Thus, the implicit rate between two countries that generally refers to the non-country U’s currencies quoted in some other third country currency and it is usually Country U’s dollars.

Conclusion

Country U’s dollars are the general quoted currency between two countries’ currencies because it mainly decreases the number of possible cross-currency quotes.

Answer 7

Chapter 18, Problem 18.1C

Summary Introduction

To determine: The currency in which the cross-rates between two currency are stated

Introduction:

The price of a country’s currency that in terms of another nation’s currency is the exchange rate. The rate of exchange can be either floating or fixed. The two components of the exchange rates are the foreign currency and the domestic currency.

Answer 8

Expert Solution & Answer

Explanation of Solution

The cross rate is the implicit rate between two countries. Thus, the implicit rate between two countries that generally refers to the non-country U’s currencies quoted in some other third country currency and it is usually Country U’s dollars.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Conclusion

Country U’s dollars are the general quoted currency between two countries’ currencies because it mainly decreases the number of possible cross-currency quotes.

Answer 12

Ch. 18.1 - Prob. 18.1ACQ Ch. 18.1 - Prob. 18.1BCQ Ch. 18.2 - What is triangle arbitrage?Ch. 18.2 - Prob. 18.2BCQ Ch. 18.2 - Prob. 18.2CCQ Ch. 18.3 - Prob. 18.3ACQ Ch. 18.3 - Prob. 18.3BCQ Ch. 18.4 - Prob. 18.4ACQ Ch. 18.4 - Prob. 18.4BCQ Ch. 18.5 - Prob. 18.5ACQ

Concept explainers

Explanation of Solution

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Chapter 18 Solutions