If the Current Account Balance Is $30 Billion, and the Capital

question 286

Multiple Choice

If the current account balance is $30 billion, and the capital account balance is $35 billion, then the official settlements account balance is billion, and the official reserves _.

• A) $5 billion; increase
• B) $5 billion; decrease
• C) - $5 billion; decrease
• D) - $5 billion; increase

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Definitions:

Forward Contract

A specialized agreement crafted between two parties to transact an asset at a certain price on a future agreed date.

ASPE

Accounting Standards for Private Enterprises, a set of accounting principles and standards in Canada designed for private companies.

Exchange Rate

The price at which one currency can be exchanged for another currency in the foreign exchange market.

Cash Flow Hedge

A type of hedge that is used to manage exposure to variability in cash flows, typically associated with forecasted transactions that might affect profit or loss.