Thornton Corp

question 34

Multiple Choice

Thornton Corp. is based in the United States and has no foreign subsidiaries. It has extensive liabilities denominated in Indian rupees resulting from imports from India. However, Thornton's revenues are denominated solely in U.S. dollars. Which of the following is probably not true?

• A) Thornton would benefit from a depreciation of the Indian rupee.
• B) Thornton has at least some transaction exposure.
• C) Thornton has at least some economic exposure.
• D) Thornton has at least some translation exposure.
• E) All of these are true.

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Definitions:

Interval Measure

A financial metric used to determine how long a company can operate with its available amount of current assets, calculated usually in months.

Time-Trend Analysis

A method of forecasting future data points by analyzing the patterns of historical data over time.

Quick Ratio

A liquidity ratio that measures a company's ability to meet its short-term obligations with its most liquid assets.

Peer Group

A set of companies or individuals that share similar characteristics or interests, often used as a benchmark for performance comparison.