​Assume That the British Pound and Swiss Franc Are Highly

question 71

Multiple Choice

​Assume that the British pound and Swiss franc are highly correlated. A U.S. firm anticipates the equivalent of $1 million cash outflows in francs and the equivalent of $1 million cash outflows in pounds. During a ____ cycle, the firm is ____ affected by its exposure.

• A) ​strong dollar; favorably
• B) ​weak dollar; not
• C) ​strong dollar; not
• D) ​weak dollar; favorably

---

Definitions:

Tax Freedom Day

A symbolic day representing when a nation's taxpayers have collectively earned enough income to pay the year's total tax bill.

Marginal Tax Rate

The rate at which an additional dollar of income is taxed, reflecting the percentage of each additional dollar that is paid in tax.

Transfer Payments

Payments made by the government to individuals, without the government receiving any goods or services in return, such as welfare payments and social security benefits.

Exhaustive

Thorough and comprehensive in approach or scope.