To determine the U.S. dollar equivalent of an amount stated in a foreign currency, multiply the foreign currency by the indirect exchange rate.

Question

Quizplus · Accepted Answer

To determine the U.S. dollar equivalent of an amount stated in a foreign currency, you multiply the foreign currency amount by the direct exchange rate, not the indirect exchange rate. The direct exchange rate tells you how much one unit of the foreign currency is worth in U.S. dollars.

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