Final answer:
The exchange rate of USD/EUR at 1.2875 means 1 EUR equals 1.2875 USD, affecting international business profits and currency conversion.
Step-by-step explanation:
A USD/EUR exchange rate of 1.2875 means that for every 1 euro, you can exchange it for 1.2875 U.S. dollars. Therefore, 1 EUR will buy 1.2875 USD. The correct answer is b. 1.2875 USD. The exchange rate provides crucial information for converting one currency to another and affects international business. For example, if we consider a French firm with yearly costs in euros and revenues in U.S. dollars, changes in the exchange rate can significantly impact their profits. A stronger euro would mean less revenue when converting from dollars to euros, while a weaker dollar can benefit U.S. exports.