If a US Exporter Expects to Receive a Payment of £200,000 from £200,000

question 5

Multiple Choice

If a U.S. exporter expects to receive a payment of £200,000 from a London importer in two months after the products are shipped. With the current rate it would be worth $300,000. Two months later the rate changes and reduces the actual dollar avenue to $260,000. Therefore, the U.S. exporter will suffer a $40,000___________________.

• A) foreign exchange loss
• B) foreign exchange gain
• C) borrowing loss
• D) net loss

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Definitions:

Tax Imposition

The act of levying taxes on individuals, corporations, or goods and services, typically by government authorities to generate revenue.

Tax Burden

The financial charge or amount of taxation imposed on an individual, corporation or other entities, representing a significant part of their income or revenue.

Production Ban

A government or regulatory imposed prohibition on the manufacturing, sale, or distribution of certain products, typically for health, safety, or environmental reasons.

Murder Rate

A measure of the number of murders in a given area or population over a specific period of time, often per 100,000 individuals.