Question19 Whilst Barbara was travelling in the US, she purchased the new iPhone 17 Pro at the airport for USD $1,299. Her CBA credit card charged her AUD $2,051.03, excluding any fees. The direct quote for the exchange rate applied by CBA is: AUD/USD 1.5789 USD/AUD 1.5789 AUD/USD 0.6333 None of the options are correct USD/AUD 0.6333 ResetMaximum marks: 1 Flag question undefined

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BlackTom AI · Accepted Answer

Question restatement: Barbara bought an iPhone in the US for USD 1,299 while in Australia her CBA card charged AUD 2,051.03. The task asks which direct exchange quote applied by CBA corresponds to this transaction. Answer options provided: AUD/USD 1.5789, USD/AUD 1.5789, AUD/USD 0.6333, None of the options are correct, USD/AUD 0.6333.

Option 1: AUD/USD 1.5789. This option expresses how many USD you get per 1 AUD. If you apply 1.5789 USD per 1 AUD to convert AUD to USD, the AUD amount would be larger in USD terms. However, in this transaction we know the card charged AUD to settle a USD purchase, so the relevant conversion would be the amount of AUD per USD, not USD per AUD. This makes AUD/USD 1.5789 an unlikely direct quote for a USD→AUD conversion.

Option 2: USD/AUD 1.5789. This option expresses how many AUD you get per 1 USD. If 1 USD buys 1.5789 AUD, then converting USD to AUD would yield an AUD amount that aligns with the observed charge: 1,299 USD × 1.5789 AUD/USD ≈ 2,051 AUD, matching the AUD 2,051.03 charged. This alignment supports the interpretation that the direct quote used for the USD→AUD conversion here is the USD/AUD quote of 1.5789.

Option 3: AUD/USD 0.6333. This would imply 1 AUD equals about 0.6333 USD. The reciprocal of 0.6333 is approximately 1.5789, which does match the observed AUD→USD rate, but this option presents the reciprocal in the AUD/USD notation. Since the transaction involves converting USD to AUD, this would not be the direct quote shown for the USD→AUD conversion itself.

Option 4: None of the options are correct. Given the calculation, there is a consistent rate that explains the transaction, so this option is unlikely.

Option 5: USD/AUD 0.6333. This would imply 1 USD buys 0.6333 AUD, which would not reproduce the observed AUD charge of ~2051 AUD for a 1299 USD purchase.

Putting the pieces together, the observable conversion result (AUD charged = USD amount × rate) is 2,051.03 AUD ≈ 1,299 USD × 1.5789 AUD per USD. This shows that the direct quote aligning with the USD→AUD conversion in this scenario is USD/AUD 1.5789. The other options either present the inverse, misinterpret the direction of the quote, or propose a rate that does not reproduce the observed charge.

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