If 1 euro is priced at $1.25 and if 1 euro will also buy 88 Japanese yen($1 = ¥88), in equilibrium, with no arbitrage opportunities, how much is the cross rate between the yen and the dollar (yen-dollar rate)?
a. ¥150/$
b. ¥70.4/$
c. ¥20/$
d. ¥5/$
Ans: b. ¥70.4/$
Economics
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