If it takes 1.25 euros to buy 1 US dollar, the direct quote for the exchange rate is:Group of answer choicesUSD/EURO 0.25EURO/USD 1.00USD/EURO 1.25EURO/USD 0.8

1. Break Down the Problem

To determine the direct quote for the exchange rate in this context, we need to understand the relationship between euros and US dollars given the rate of 1.25 euros for 1 US dollar. We'll express the rate in both USD/EURO and EURO/USD formats.

2. Relevant Concepts

• Exchange Rate: Indicates how much of one currency you need to spend to buy another.
• If $1 \text{ USD} = 1.25 \text{ EUR}$, then the inverse will provide the value of EUR in terms of USD.

3. Analysis and Detail

1. To find the EURO/USD rate, we take the reciprocal of the USD/EURO rate. $\text{EURO/USD} = \frac{1}{1.25} = 0.8$

2. The other formats can be derived similarly:

   • USD/EURO: Since $1 \text{ USD} = 1.25 \text{ EUR}$, we can express this as: $\text{USD/EURO} = \frac{1}{1.25} = 0.8$

4. Verify and Summarize

• Since we previously calculated EURO/USD as 0.8, the USD/EURO form confirms that when you have 1 USD, you can exchange it for 1.25 EUR.
• Thus, the values represented:
  • EURO/USD = 0.8 confirms our finding.

Final Answer

The correct direct quote for the exchange rate is EURO/USD = 0.8.