Reference: Ref 20-3 (Table: Exchange Rates) Using the Hypothetical Exchange

question 45

Multiple Choice

Reference: Ref 20-3 (Table: Exchange Rates) Using the hypothetical exchange rate information in the table, which of the following statements is correct?

• A) In 2004, the U.S. dollar had not changed relative to all of the other currencies.
• B) In 2004, the Japanese yen had depreciated relative to the U.S. dollar.
• C) In 2004, the Japanese yen had appreciated relative to the European euro.
• D) In 2004, the European euro had appreciated relative to the British pound.

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Definitions:

Measurement

The process of determining the monetary amounts at which the elements of the financial statements are to be recognised and carried in the statement of financial position or recognised in the statement of profit or loss and other comprehensive income.

Discount Rate

The discount rate is the interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.