Suppose that the current exchange rate is €0.80 = $1.00. The direct quote, from the U.S. perspective isGroup of answer choicesnone of the options€0.80 = $1.00.£1.00 = $1.80.€1.00 = $1.25.
Question
Suppose that the current exchange rate is €0.80 = 1.00.£1.00 = 1.25.
Solution
The direct quote from the U.S. perspective is €0.80 = $1.00. This is because a direct quote is the home currency price of one unit of foreign currency, and in this case, the home currency is the U.S. dollar.
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