Assume you are a US citizen and currently you can exchange $180(USD) for 125 GBP (British Pounds). What is the Indirect quote relating the USD to the GBP?
To find the indirect quote relating the USD to the GBP, we need to flip the exchange rate you provided, which is the direct quote. The direct quote is given as the number of units of foreign currency per one unit of the domestic currency.
In this case, you have $180 USD for 125 GBP. So, the direct quote is 125 GBP per 180 USD.
To find the indirect quote, we need to reverse this rate. This means we need to divide 1 by the direct quote.
Indirect Quote = 1 / Direct Quote
Let's calculate it:
Indirect Quote = 1 / (125 GBP / 180 USD)
Indirect Quote = 180 USD / 125 GBP
Thus, the indirect quote relating the USD to the GBP is 1.44 USD per 1 GBP. This means that for every British Pound (GBP), you would need 1.44 US Dollars (USD).