Generally, exchange rates are quoted as a single price of a unit of foreign currency rather than a ratio because:
A) the ratio of the units of home currency to units of foreign currency is always equal to one.
B) the denominator is always equal to one.
C) the price is fixed by the government.
D) the rate is adjustable in increments of 25 basis points.

Question

Quizplus · Accepted Answer

Exchange rates are quoted as a single price of a unit of foreign currency rather than a ratio because the denominator is always equal to one. This means that for every unit of foreign currency, there is a fixed price in the home currency. For example, if the exchange rate is 1.25 USD/EUR, it means that one euro costs 1.25 US dollars. If it were quoted as a ratio, it would be 0.8 EUR/USD, which is equivalent but less intuitive for most people.

Generally, Exchange Rates Are Quoted as a Single Price of a Unit