The Effect on Revenues and Expenses from Variations in the Value

question 82

Multiple Choice

The effect on revenues and expenses from variations in the value of the U.S.dollar in terms of other currencies is called:

• A)interest rate risk
• B)exchange rate risk
• C)purchasing power risk
• D)financial risk
• E)none of the above

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Definitions:

Inflation Rate

The pace at which prices for general goods and services escalate, causing a decline in the ability to purchase.

Treasury Bill

Short-term government securities with maturity periods of one year or less, sold at a discount from face value.

Canadian Dollars

The recognized monetary unit of Canada, symbolized by CAD or C$.

Exchange Rates

The rate at which one currency can be exchanged for another, affecting international trade and finance.