Asked by Kristen Salcedo on May 06, 2024
Verified
A foreign currency quote of $1.00 : 0.85 British pounds is ____.
A) an indirect quote in Great Britain, but a direct quote in the U.S.
B) a direct quote in Great Britain, but an indirect quote in the U.S.
C) a direct quote in both great Britain and the U.S.
D) an indirect quote in both Great Britain and the U.S.
Indirect Quote
A way of quoting exchange rates in foreign exchange markets, representing the amount of foreign currency required to buy one unit of the domestic currency.
Direct Quote
A direct quote is a foreign exchange rate expressed in terms of how much of the domestic currency is required to buy one unit of the foreign currency.
British Pounds
The official currency of the United Kingdom, denominated as GBP (Great British Pound).
- Gain an understanding of the differences between direct and indirect currency quotes in forex transactions.
Verified Answer
KG
Kristofer GaliettiMay 12, 2024
Final Answer :
B
Explanation :
The quote is stating that $1.00 can be exchanged for 0.85 British pounds. In Great Britain, the British pound is the base currency, so this is a direct quote. In the U.S., the dollar is the base currency, so this is an indirect quote.
Learning Objectives
- Gain an understanding of the differences between direct and indirect currency quotes in forex transactions.