ayodayo

Janakisri:

converting back to dolars would use the bid in the EUR:USD quotes (.9965) so the final return would be 40500 * .9965 = 40358

and the total gain would be 40358/39840 - 1 = 1.3% return

This is a tricky Q b/c they don't start with a $ amount so you need to work backward first to find the original investment from the investor, then work forward to find the end result.

The rule that I use is if you posses the Base currency(first currency, ie EUR is EUR:USD) then multiply by the bid, if you posses the second currency then divide by the ask.
Using that logic Mambovipi, if you have 1 EUR you can buy 1*.9959 dollars, or if you have 1 USD then you can exchange for 1/.9960 EUR