Which One of the Following Sets of Exchange Rates Shows

question 9

Multiple Choice

Which one of the following sets of exchange rates shows "cross-rate equality" (or"consistent cross rates") ?

• A) 50 Indian rupees = $1; $2 = 1; 25 Indian rupees = 1
• B) 1 Indian rupee = 1.5 Pakistani rupees; 50 Pakistani rupees = 1 Singapore Dollar; 1 Singapore dollar = 75 Indian rupees
• C) 2 Swiss francs = $1; 1 Swiss franc = € ; €1 = $1.50
• D) $2 = 1; €1.5 = 1; €1 = $0.75

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Definitions:

NCI

Non-Controlling Interest, a line item on the consolidated balance sheet that reflects the equity in a subsidiary not attributable directly or indirectly to the parent company.

Consolidation Approach

An accounting method used where a parent company combines its financial statements with those of its subsidiaries as if they comprise a single entity.

Parent-Company Method

An approach in consolidation where the financial statements of the parent company include its subsidiaries' operations by integrating their assets, liabilities, and equity as if they were wholly owned.

Fair Value

The amount one would expect to receive from selling an asset or the cost to transfer a liability in a smooth transaction among market players on the date of valuation.