As with all GRE problems, go with what you're given, make your deductions, and solve the problem.
We know that a gold Australian Kangaroo coin has exactly 1 troy ounce of gold in it, and a face value of AU$100.
We also know that, at a given moment, the price of gold was US$1775.30 per troy ounce, and the exchange rate was such that one Australian dollar was equal to 1.016 US dollars.
What can we deduce?
Right away, we can deduce that, at that given moment, the Kangaroo coin had an intrinsic value of $1775.30-- in US dollars.
We can also immediately deduce that 100 Australian dollars-- the coin's face value-- is equal to 101.6 US dollars.
At this point, it seems easy to find the ratio of intrinsic value to face value:
1775.30 : 101.6 is approximately
17.473.
Note that it's important not to mix your units. Both elements of the above ratio are in US dollars.
1 comment:
As with all GRE problems, go with what you're given, make your deductions, and solve the problem.
We know that a gold Australian Kangaroo coin has exactly 1 troy ounce of gold in it, and a face value of AU$100.
We also know that, at a given moment, the price of gold was US$1775.30 per troy ounce, and the exchange rate was such that one Australian dollar was equal to 1.016 US dollars.
What can we deduce?
Right away, we can deduce that, at that given moment, the Kangaroo coin had an intrinsic value of $1775.30-- in US dollars.
We can also immediately deduce that 100 Australian dollars-- the coin's face value-- is equal to 101.6 US dollars.
At this point, it seems easy to find the ratio of intrinsic value to face value:
1775.30 : 101.6 is approximately
17.473.
Note that it's important not to mix your units. Both elements of the above ratio are in US dollars.
We done? I think we are.
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