Suppose the direct foreign exchange rates in U.S.dollars are:
1 Singapore dollar = $0.7025
1 Cyprus pound = $2.5132
-Based on the information given above,the indirect exchange rates for the Singapore dollar and the Cyprus Pound (from a U.S.perspective)are:
A)1.7655 Singapore dollars and 1.4235 Cyprus pounds respectively.
B)0.2975 Singapore dollars and 1.5132 Cyprus pounds respectively.
C)2.1622 Singapore dollars and 0.4625 Cyprus pounds respectively.
D)1.4235 Singapore dollars and 0.3979 Cyprus pounds respectively.

Question

Quizplus · Accepted Answer

To find the indirect exchange rate, we need to take the reciprocal of the direct exchange rate.

For Singapore dollar: 
Indirect exchange rate = 1 / direct exchange rate = 1 / 0.7025 = 1.4235

For Cyprus pound: 
Indirect exchange rate = 1 / direct exchange rate = 1 / 2.5132 = 0.3979

Therefore, the correct answer is D, which gives the indirect exchange rates as 1.4235 Singapore dollars and 0.3979 Cyprus pounds respectively.

Suppose the Direct Foreign Exchange Rates in U