Under What Condition Should the Gain or Loss from Translating

question 11

Multiple Choice

Under what condition should the gain or loss from translating foreign currency profit of subsidiary into the parent's home currency be included in the subsidiary's measure of performance?

• A)if the subsidiary manager is authorized to hedge the translation exposure
• B)if there is a translation gain,but not if there is a translation loss
• C)if the multinational corporation is using the same method of translation for performance evaluation as it does for financial reporting
• D)if the impact on cash flows from foreign exchange is minimal

---

Definitions:

Slow Reproduction Rate

A characteristic of some species that have fewer offspring and longer gestation periods, often leading to vulnerability and risk of extinction.

Biological Extinction

The disappearance of an entire species from the face of the Earth, which occurs when the last individual member dies.

Vulnerable

A status indicating that a species is at high risk of endangerment in the wild, often used in conservation contexts to prioritize efforts.

Keystone Species

A species that has a disproportionately large effect on its environment relative to its abundance.