Given a Direct Quote, We Can Obtain an Indirect Quote

question 28

Multiple Choice

Given a direct quote, we can obtain an indirect quote (which is simply the reciprocal of the direct quote) , and vice versa. For example, on March 9, 2009, a U.S. investor is given a direct quote of 1.2674 U.S. dollars for one euro. That is, the price of a euro is $1.2674. What would be the indirect quote for the U.S. investor; that is, one U.S. dollar can be exchanged for how many euros (which is the euro price of a U.S. dollar) ?

• A) 1.2674
• B) 1.0000
• C) 0.8988
• D) 0.7889

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Definitions:

Total Capital

The sum of a company's equity capital and debt, representing the total funds that a company can use for operations.

Total Assets

The sum of all current and non-current assets on a company's balance sheet, representing everything the company owns that has value.

Open Account

It generally refers to a commercial credit line that allows for the purchase of goods and services without immediate payment, payable at a later date.

Down Payment

An initial payment made when purchasing a good or service, typically a percentage of the total price, with the remainder due later.