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Dear Tutor,
I have a question re exchange rate formulation.
e.g $/Euro 1.62-1.65. first rate means buy, second sell
Does it means that first rate is always lower than second?
and in case in $/euro, it will be vice versa, than in a real world. Will it be the same rule in whole exam?thank you in advance
The first rate is always the lower.
The first rate is the rate to use if the company is buying the first currency (in your case $’s), and the second is the rate to use if the company is selling the first currency ($’s).
I don’t know why you say it will be vice versa that in a real world – some countries quote one way round and some countries quote the other way round.
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