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Cross rates and Purchasing Power Parity

19-2) Cross Rates: A currency trader observes that in the spot exchange market, 1 U.S. dollar can be exchanged for 4.0828 Israeli shekels or for 111.23 Japanese yen. What is the cross exchange rate between the yen and shekels; that is, how many yen would you receive for every shekel exchanged?

19-4) Purchasing power parity: A television set costs $500 in the United States. The same set costs 725 euros. If purchasing power parity holds, what is the spot exchange rate between the dollar?

19-11) Purchasing Power parity: In the spot market 7.8 Mexican pesos can be exchange for 1 U.S. dollar. A compact disc costs $15 in the United States. If purchasing power parity (PPP) hold, what should be the price of the same disc in Mexico?

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19-2 Cross Rates: A currency trader observes that in the spot exchange market, 1 U.S. dollar can be exchanged for 4.0828 Israeli shekels or for 111.23 Japanese yen. What is the cross exchange rate between the yen and shekels; that is, how many yen would you receive for every shekel exchanged?

1 US dollar= 4.0828 Israeli ...

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Answers 3 questions on Cross rates, Purchasing Power Parity.

$2.19