Suppose That the Exchange Rate Between the Dollar and the Peso

question 141

Multiple Choice

Suppose that the exchange rate between the dollar and the peso changed from 6 pesos per dollar to 8 pesos per dollar. This change means that the

• A) peso appreciated.
• B) dollar depreciated.
• C) peso depreciated.
• D) Both answers A and B are correct.

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Definitions:

Legal Document

A written instrument that formally expresses a legally enforceable act, process, or contractual duty, obligation, or right.

Times Interest Earned

A ratio that measures a company's ability to meet its interest payments based on its earnings before interest and taxes.

Net Income

The profit of a company after all expenses and taxes have been subtracted from total revenue, indicating the company's actual profitability.

Interest Expense

The cost incurred by an entity for borrowed funds; it is the price paid for the use of borrowed money.