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Direct quotation is where the cost of one unit of foreign currency is given in units of local currency, whereas indirect quotation is where the cost of one unit of local currency is given in units of foreign currency.
I will be surprised if the examiners tests you on the definitions (although obviously you are expected to be able to know of to convert whichever way round the exchange rate is given).
If you have not already watched them, then our lectures on foreign exchange risk management cover everything you need for the exam.
For example,
If i am in the UK,
and the exchange rate between UK and US is 1 Pound= $1.52
This is an indirect quote? Because the cost of local currency (UK) is given in foreign currency (US)in the Kaplan text book, it says bank always buys low, this rule is for the direct quote right?
and for indirect quote it will be the other way round?I read in one of the articles that only direct quotes will be given
https://www.accaglobal.com/lk/en/student/exam-support-resources/fundamentals-exams-study-resources/f9/technical-articles/forex.htmlThe quote could be either way round in the exam.
With regard to which rate to use, then best is to watch our free lectures – this is covered in details with examples.
After looking at this post, I just feel worried about the quotes
Forex, there will be calculation only on forward and Money market hedges?
For me quotes doesn’t matter since if I know wat rate to use ryt?
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