The Higher the Exchange Rate Today, the

question 459

Multiple Choice

The higher the exchange rate today, the

• A) greater the quantity of U.S. dollars demanded in the foreign exchange market today.
• B) greater is the expected profit from buying U.S. dollars today and holding them.
• C) smaller is the expected profit from buying U.S. dollars today and holding them.
• D) smaller is the expected profit from buying foreign currency today and holding it.

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Definitions:

After-tax Income

The amount of income left after all federal, state, and withholding taxes have been deducted.

Tax Rate

The rate at which taxes are levied on the income of a person or company.

FIFO

"First-In, First-Out," an inventory valuation method assuming goods are sold in the order they are acquired, affecting the cost of goods sold and ending inventory.

Average-cost Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all similar items available during the period.