A confusing "quirk" of international exchange rates occurs when calculating the percentage change in spot rates from one period to another. The percent change in the spot rate from one period to another when quoted using foreign currency terms is always greater than the percent changes quoted when using home currency terms.

Question

Quizplus · Accepted Answer

The percentage change in the spot rate from one period to another will be the same magnitude but opposite in sign, whether quoted in foreign currency terms or home currency terms, due to the reciprocal nature of exchange rates.

A Confusing "Quirk" of International Exchange Rates Occurs When Calculating