A Currency Trader Observes the Following Quotes in the Spot

question 20

Multiple Choice

A currency trader observes the following quotes in the spot market: 1 U.S.dollar =1.21 Japanese yen
1 British pound =2.25 Swiss francs
1 British pound =1.65 U.S.dollars
Given this information,how many yen can be purchased for 1 Swiss franc? Do not round the intermediate calculations and round the final answer to four decimal places.

• A) 1.0825
• B) 0.7897
• C) 0.7631
• D) 0.6921
• E) 0.8873

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Definitions:

Foreign Trade

The exchange of goods, services, and capital between countries, crossing national borders.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, leading to widespread unemployment and poverty.

Stock Market Speculation

The act of trading stocks, commodities, or other financial instruments with the aim of making profits from short-term fluctuations in their prices, often involving high risk.

Protective Tariffs

Tariffs imposed on imports to protect domestic industries from foreign competition by increasing the cost of imported goods.