Suppose a Franco-Dutch Airline Company in Paris receives the following indirect quotes in New York: 0.92 -
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Question:
Suppose a Franco-Dutch Airline Company in Paris receives the following indirect quotes in
New York: 0.92 - 3 and 0.63 - 4.
Required:
i. Based on the above information, determine the quotes for the cross rate given. (6 marks)
ii. Franco-Dutch plans to invest 2,000,000. Should the company invest when the cross rate is quoted at 0.6783 - 0.6990 (8 marks)
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