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Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250

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BuyFindarrow_forward

Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250
Textbook Problem

CROSS RATES Use the foreign exchange section of a current Issue of The Wall Street Journal to look up the three currencies in problem 19-8. What is the current exchange rate between Swedish kronas and pounds?

Summary Introduction

To explain: Exchange rate between Country S kronas and Country B pound.

Introduction:

Exchange Rate:

The exchange rate is the rate in which price of the country currency is measured in the term of the other country. There are two steps of computing 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 the two countries is called cross rate.

Explanation

Given information:

The information that is derived from the Journal WS as on 28 September 2017:

Formula to calculate the current exchange rate between Country S kronas and Country B pound is as follows:

Country Skronas=Country Skronas

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