Yesterday, the Exchange Rate for the U

question 70

Multiple Choice

Yesterday, the exchange rate for the U.S dollar and the euro was 1 euro for every $1.10. Today, it is 1 euro for every $1.20. Which currency is depreciating?

• A) the euro
• B) the U.S. dollar
• C) both
• D) neither

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Definitions:

Foreign Subsidiary

A company owned or controlled by another company that is based in another country.

Amortization Expense

The systematic and gradual charge to expense of the cost of an intangible asset over its useful life.

Functional Currency

A redefined definition: The currency that a business uses for most of its transactions, reporting, and financial statements.

Capital Assets

Long-term tangible or intangible assets used in operations of a business that are not intended for sale in the regular course of business.