If a Firm's Balance Sheet Has an Equal Amount of Exposed

question 40

Multiple Choice

If a firm's balance sheet has an equal amount of exposed foreign currency assets and liabilities and the firm translates by the temporal method, then:

• A) the net exposed position is called monetary balance.
• B) the change is value of liabilities and assets due to a change in exchange rates will be of equal but opposite direction.
• C) Both A and B are true.
• D) none of the above

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Definitions:

Major Vein

A large blood vessel that carries blood towards the heart from various parts of the body, essential for the circulatory system.

Legs

Limbs on the lower part of the body, enabling movement and support of an individual's weight.

Aortic Semilunar

Relating to the semilunar valve located between the left ventricle of the heart and the aorta, regulating blood flow.

Aorta

The largest artery in the body, carrying oxygen-rich blood from the heart to various parts of the body.