If a Firm's Balance Sheet Has an Equal Amount of Exposed

question 33

Multiple Choice

If a firm's balance sheet has an equal amount of exposed foreign currency assets and liabilities and the firm translates by the temporal method, then

• A) the net exposed position is called monetary balance.
• B) the change of value of liabilities and assets due to a change in exchange rates will be of equal but opposite direction.
• C) both A and B are true.
• D) none of the above.