Question

Identify an entry that is reversed in terms of the forex rates for US Dollar on a day recently.

• A. 1 US $ = Rs. 39.35
• B. 1 US $ = € 1.42
• C. 1 US $ = £ 0.48
• D. 1 US $ = ¥ 114

Hint:

Compare each currency's real-world strength against the dollar: a stronger currency should need less than 1 unit per dollar, not more.

Answer 1

The Correct Option is B

This question checks whether you can read a foreign exchange quote the right way round. A quote like "1 US $ = X units of currency Y" tells you how many units of Y you get for one dollar. If a currency is stronger than the dollar, you need fewer than 1 unit of it to equal a dollar, not more.

1. 1 US $ = Rs. 39.35: In the mid-2000s, the rupee traded at around Rs 39 to 40 per dollar. Since the rupee is a weaker currency than the dollar, it takes many rupees to buy one dollar. This entry reads correctly.
2. 1 US $ = € 1.42: The euro has traded stronger than the dollar for most of its history, generally needing only about 0.70 to 0.75 dollars-worth of euro to equal one dollar. In other words, one euro was worth roughly 1.35 to 1.42 dollars, not the other way round. So the correct statement should read "1 Euro = 1.42 US $", not "1 US $ = 1.42 Euro". This entry has the two currencies swapped.
3. 1 US $ = £ 0.48: The British pound is also stronger than the dollar, with 1 pound worth around 2 dollars at the time. So one dollar equals roughly half a pound, close to 0.48. This entry reads correctly.
4. 1 US $ = ¥ 114: The Japanese yen is a weaker currency unit, and one dollar bought well over 100 yen through the mid-2000s. This entry reads correctly.

Only the euro entry has the exchange rate written backwards: it should state how many dollars one euro buys, not the other way round. Everywhere else in the list, the pattern "1 dollar = many units of a weaker currency" or "1 dollar = a fraction of a unit of a stronger currency" holds true.

Let's summarize:

• Rupee and yen are weaker than the dollar, so one dollar buys many of them, and both entries are consistent.
• Pound and euro are stronger than the dollar, so one dollar should buy less than one unit of either, but only the pound entry respects this, while the euro entry has been flipped.

The reversed entry is option (B), "1 US $ = € 1.42".