Asked by
Kenalemang Agnes
on Dec 10, 2024
Verified
A U.S. company sells merchandise to a foreign company denominated in U.S. dollars. Which of the following statements is true?
A) If the foreign currency appreciates, a foreign exchange gain will result.
B) If the foreign currency depreciates, a foreign exchange gain will result.
C) No foreign exchange gain or loss will result.
D) If the foreign currency appreciates, a foreign exchange loss will result.
E) If the foreign currency depreciates, a foreign exchange loss will result.
Foreign Exchange Gain
A profit resulting from the appreciation of one currency against another in the foreign exchange market.
U.S. Dollars
The currency of the United States, commonly used as a standard unit of currency in international markets.
- Assess the effects of exchange rate movements on foreign currency-based transactions and strategies for hedging.
Verified Answer
GB
Learning Objectives
- Assess the effects of exchange rate movements on foreign currency-based transactions and strategies for hedging.