A currency trader observes the following quotes in the spot market:
1 U)S. dollar = 10.875 Mexican pesos
1 British pound = 6.205 Danish krone
1 British pound = 1.65 U.S. dollars
Given this information, how many Mexican pesos can be purchased for 1 Danish krone?
A) 2.7490
B) 2.8195
C) 2.8918
D) 2.9641
E) 3.0382

Question

Quizplus · Accepted Answer

To find how many Mexican pesos can be purchased for 1 Danish krone, first convert Danish krone to British pounds, then British pounds to U.S. dollars, and finally U.S. dollars to Mexican pesos. The calculation is: (1/6.205) * 1.65 * 10.875 = 2.8918 Mexican pesos.

A Currency Trader Observes the Following Quotes in the Spot