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Hi Sir,
Hope your having a good evening. I am really struggling to understand whether to divide / times and which rates to pick from spot low or high, I been through books, text books your videos. Is there a specific way to remember this. I know its almost a day before exam but your help might get me a few easy marks, as I know how to do it but just not sure what to pick in what situation.
Thanks in advance.
For example, if the quote is $/EUR 1.2 – 1.3
Then it means that many $’s (the first currency) equals 1 EUR (the second currency).
So if you are converting $’s to Euros you divide. If you are converting euros to $’s then you multiply.
The lower quote (1.2) is the rate to use if the company is buying the first currency ($’s). The higher quote (1.3) is the rate to use if the company is selling the first currency ($’s)
No – payment or receipt determines which whether you are converting $’s to Euros or Euros to $’s but the rule is always as above.
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