If the Unit of Foreign Currency Is the Peso,in Which

question 75

Multiple Choice

If the unit of foreign currency is the peso,in which case is the real exchange rate 1.2?

• A)the U.S.price is $2,the foreign price is 5 pesos,and the exchange rate is 3 pesos per dollar.
• B)the U.S.price is $3,the foreign price is 18 pesos,and the exchange rate is 5 pesos per dollar.
• C)the U.S.price is $5,the foreign price 12 pesos,and the exchange rate is 2 pesos per dollar.
• D)the U.S.price is $10,the foreign price is 3 pesos,and the exchange rate is 4 pesos per dollar.

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Definitions:

Operating Income

The profitability from a company's core business operations, excluding deductions of interest and taxes.

Net Profit Margin Ratio

A financial performance metric that calculates the percentage of net income to revenue, indicating how much profit a company generates from its revenues.

Accruing Interest

The process of recognizing interest expense or income that has been incurred but not yet paid or received, over a period of time.

Depreciation Expense

An accounting method that allocates the cost of tangible assets over their useful lives, reflecting the reduction of value over time.