A puzzle of exchange rate,plz!!!

This topic has 1 reply, 2 voices, and was last updated 14 years ago by vesela.jana.

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October 21, 2011 at 11:47 pm #50181
antido
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when doing question of risk management,we must be familiar with exchange rate,especially so called money market hedge methods.eg.1£=1.55±0.02$.this confuse me as i really wanna know when we use “+” and when we should use “-” when converting the currency?anybody will help me,plz!
October 28, 2011 at 2:45 pm #88991
vesela.jana
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Hi,
in the real world ex rates are quoted as a range, e.g 1.9854 +/- 0.0003.
This can be interpreted as 1.9851 to 1.9857.
The correct rate depends on upon wheter you are translating a cost (1.9851) or revenue (1.9857)
Hope this helps 🙂
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