Question : Which of the following is an example of an indirect exchange rate quotation?
Option 1: USD/JPY = 110.50
Option 2: EUR/GBP = 0.85
Option 3: GBP/CHF = 1.25
Option 4: AUD/CAD = 0.95
Answer (1)
12th Jan, 2024
Correct Answer:
EUR/GBP = 0.85
Solution : The correct answer is b) EUR/GBP = 0.85
An indirect exchange rate quotation is when the domestic currency is the base currency, and the foreign currency is the counter currency. In this example, EUR (Euro) is the domestic currency, and GBP (British pound) is the foreign currency. The exchange rate is expressed as the amount of the foreign currency required to purchase one unit of the domestic currency. Therefore, EUR/GBP = 0.85 means that it takes 0.85 British pounds to buy one Euro.
Comments (0)
