Where Profits Generated by the Foreign Operation Are Retained in the Foreign

question 21

Multiple Choice

Where profits generated by the foreign operation are retained in the foreign entity and used for its expansion:

• A) the foreign operation's currency is likely to be the presentation currency.
• B) the foreign operation's currency is likely to be the functional currency.
• C) the reporting entity's currency is likely to be the functional currency.
• D) the reporting entity's currency is likely to be the presentation currency.

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Definitions:

Mean

The average of a set of numbers, calculated by adding all the numbers together and dividing by the count of the numbers.

Sample Data

A subset of data selected from a larger population, used for statistical analysis.

Geometric Mean

The nth root of the product of n numbers, used to calculate average rates of return or growth over time.

Closing Stock Price

The final price at which a stock is traded during a trading session on a stock exchange.