Currency Exchange Rate

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Definition

Conversion rate between two currencies. For instance, if the exchange rate between USD and Euro is 1.274, that means it will take 1.274 dollars to convert to 1 Euro.

Formula

Currencies rates can often be confusing. Sometimes it's helpful to think of them in terms of what currency is stronger or weaker and to think about it conceptually. For instance, in the example above, I "know" the Euro is stronger, and so it would make sense that it would take MORE dollars to be equal to one Euro.

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