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Chapter 1: Q.21 (page 67)

The following table lists the foreign exchange rate between U.S. dollars and British pounds (GBP) during April 2017. Which day would have been the best for converting $250 into British pounds? Which day would have been the worst? What would be the difference in pounds?

Short Answer

Expert verified

The difference in pound will be 22.55 pounds.

Step by step solution

01

Step 1. Introduction

The rate at which the currency of one country is exchanged for the currency of another country is known as exchange rate. Different exchange rate systems such as pegged rate, floating rate, and fixed rate exists.

02

Step 2. Explanation

When converting $250 to British pounds, the optimal time is when the US dollar is relatively cheaper than the pound. The best day is April 25th, when 1 pound is worth 1.6516 dollars.

11.6516=0.6055poundperdollar

When converting $250 to British pounds, the worst day is when the US dollar is significantly cheaper than the pound. The worst day is 4-1, when 1 pound is worth 1.9406 dollars.

11.9406=0.5153poundperUSD

Differenceinpound=(0.6055-0.5153)脳250=22.55pound

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