Final answer:
The INR/AUD exchange rate, calculated using the given USD exchange rates for INR and AUD, is 60.48 INR for 1 AUD. This indicates a potential arbitrage opportunity when compared with Bank C's quote.
Step-by-step explanation:
The student question pertains to the computation of a cross exchange rate, specifically the Indian rupee (INR) to the Australian dollar (AUD) rate, given the exchange rates of INR and AUD to the USD (United States Dollar). To compute the INR/AUD rate using the given market rates, we can apply a simple cross-multiplication method.
First, let's recall the given exchange rates:
- Bank A: 75 INR = 1 USD
- Bank B: 1.24 AUD = 1 USD
- Bank C: 59 INR = 1 AUD (the direct market rate to verify)
To find the INR/CAD cross rate, we need to establish a relationship between INR and AUD through USD. Using Bank A and Bank B's rates, we can calculate:
1 AUD = (USD/AUD) x (INR/USD) = (1/1.24) x (75/1) = 60.48 INR
Comparing this with Bank C's quote of 59 INR for 1 AUD, we notice there is an opportunity for arbitrage. However, since the question asks for the calculated rate, our final answer is:
1 AUD = 60.48 INR
It is important to use all the decimal places for precision when calculating exchange rates and to round the final answer to two decimal places, as specified in the question. Understanding currency conversion and exchange rates is not only essential for academic purposes but also for real-world financial literacy, especially in situations involving foreign transactions.