When the Value of the Canadian Dollar Rises

question 110

Short Answer

When the value of the Canadian dollar rises
both our imports and our exports become more expensive.
there is no change in the price of our imports and our exports.
our imports become more expensive and our exports become cheaper.
our imports become cheaper and our exports become more expensive.
both our imports and our exports become cheaper.

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Definitions:

Daily Resettlement

The process in futures trading where the gains or losses of the day are calculated, and accounts are adjusted accordingly to reflect the market value.

Forward Contract

A bespoke contract that allows two parties to trade an asset at a fixed price on a designated date in the future.

Cereal Company

A business entity that specializes in the production and marketing of cereal and grain-based food products.

Hedger

An individual or entity that enters into a financial contract to offset potential losses or gains in a companion asset.