A US Company Buys Merchandise from a Foreign Company Denominated in in the Foreign

question 12

Multiple Choice

A U.S. company buys merchandise from a foreign company denominated in the foreign currency. Which of the following statements is true?

• A) If the foreign currency appreciates, a foreign exchange gain will result.
• B) If the foreign currency depreciates, a foreign exchange loss will result.
• C) No foreign exchange gain or loss will result.
• D) If the foreign currency appreciates, a foreign exchange loss will result.
• E) Any gain or loss will be included in comprehensive income.

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Definitions:

Law

A system of rules created and enforced through social or governmental institutions to regulate behavior.

Promise

A declaration or assurance that one will do a particular thing or that guarantees a particular outcome.

Chapter 13 Bankruptcy

A type of bankruptcy in the United States that allows individuals with a regular income to develop a plan to repay all or part of their debts under court oversight and protection.

Bankruptcy Judge

A judicial officer who presides over court proceedings related to bankruptcy cases, including the resolution of claims and distribution of assets.