Foreign exchange quotation

A quotation must identify both currencies and which amount represents one unit. If $1.25 equals £1, converting pounds to dollars uses multiplication by 1.25 and converting dollars to pounds uses division. A reciprocal quotation describes the same relationship from the other direction. Spot rates apply to the market's usual near-term settlement; forward rates apply to an agreed later date. Dealer bid and offer prices introduce a spread. Always reason from the units and the dealer's buying or selling perspective instead of memorising an unqualified multiply-or-divide rule.