To find out how many yards of ribbon Ally bought, we can calculate \( \frac{4}{5} \) of the length of ribbon Cindy bought, which is \( \frac{7}{8} \) yards.
First, we will multiply \( \frac{4}{5} \) by \( \frac{7}{8} \):
\[ \text{Ally's ribbon} = \frac{4}{5} \times \frac{7}{8} \]
To multiply these fractions, we multiply the numerators together and the denominators together:
\[ \text{Ally's ribbon} = \frac{4 \times 7}{5 \times 8} = \frac{28}{40} \]
Now, we can simplify \( \frac{28}{40} \). The greatest common divisor (GCD) of 28 and 40 is 4, so we divide both the numerator and the denominator by 4:
\[ \frac{28 \div 4}{40 \div 4} = \frac{7}{10} \]
Thus, Ally bought \( \frac{7}{10} \) yards of ribbon.