How does one create audio cross fade in iMovie?

Place the two audio clips end to end in the audio well in the timeline. When you put your cursor on each clip a fade handle will appear in the upper corner. Drag to the left the fade handle of the clip on the left to impart a fade out. Drag to the right the fade handle of the clip to the right to impart a fade in.

You can also slightly overlap the clips, depending on what effect that you want.

Another way is to insert keyframes along the volume line by holding down the Option key as you click along the line.

Then, place your cursor on each keyframe and pull down or up to adjust the volume line to impart a fade out and fade in.

Here are two help links that describe the procedures for adjusting volume and imparting fades:

https://help.apple.com/imovie/mac/10.1/#/move7a2dcdc6

https://help.apple.com/imovie/mac/10.1/#/move7a2dcdc6

-- Rich