"Andreas J. Guelzow" <> wrote on 12/02/2009
02:19:07 PM:
> Is this function really just a synonym for multiplication with one of a
> small selection of factors, or is in fact more happening here (such as
> truncation or rounding of the result)?
>
Certainly, there are very simple mathematical facts at the core of this
function: a list of a dozen conversion factors from legacy national
currencies to the Euro. But the bankers made it a bit more complicated.
The main complication is the EC's Rule 1103/97:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31997R1103:EN:HTML
Especially note Articles 4 and 5, where specific rules for rounding are
specified and what was later called the "triangulation rule" is specified
for conversion between legacy currencies using the Euro as a intermediary
format. Now why this added complexity, you might ask? I'm not sure, but
my guess is they wanted to publish a simple list of N conversion factors
and not an N^2 factors, some of which would be inexact, or favoring one
direction or another, introducing arbitrage opportunities, etc. In any
case, the intent of this function is to implement the canonical conversion
from Rule 1103/97. In fact, we should probably reference that Rule in the
definition of the function.
-Rob
