The Citibank trading desk quotes a buy rate of 1.25 and a sell rate of 2.00 for the dollar/euro exchange rate S_$/€.How much euros would you receive,if you sell $1,000 to Citibank?

Question

Quizplus · Accepted Answer

When selling dollars to Citibank, you would use the buy rate that Citibank offers for dollars, which is 1.25 dollars per euro. Therefore, for $1,000, you would receive $1,000 / 1.25 = 800 euros. However, due to the options provided and the context of the question implying a direct transaction based on the given rates, the correct calculation should align with the sell rate of 2.00, which is not directly applicable here. Given the options and the typical understanding of currency exchange, there seems to be a misunderstanding in the explanation process. The correct approach with the given rates and typical transaction understanding would indeed result in 500 euros for $1,000 at a rate of 2.00 dollars per euro, indicating a misinterpretation in the initial explanation provided.

The Citibank Trading Desk Quotes a Buy Rate of 1