Under Both the Temporal Method and the Current Rate Method

question 14

Multiple Choice

Under both the temporal method and the current rate method, what exchange rate should be used to translate a foreign subsidiary's dividends into parent company currency?

• A) Current rate
• B) Historical rate
• C) Average rate
• D) Any of the above methods can be used under both the temporal and current method.

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Definitions:

Rate of Return

The profit or deficit achieved from an investment throughout a certain period, presented as a proportion of the original investment amount.

Cumulative Loss

The total amount lost over a period, taking into account all losses incurred during that time.

Rate of Return

The financial return or shortfall from an investment across a defined span, shown as a percentage of the investment's original price.

Rate of Return

The upward or downward movement in an investment's value, measured across a specific interval, and expressed relative to the investment's initial value.