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.

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Chapter 19, Problem 9P

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.

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