Assume That the Chinese Government Allowed the Yuan to Float

question 62

Multiple Choice

Assume that the Chinese government allowed the yuan to float relative to the U.S. dollar. Appreciation in the yuan could have an adverse affect on sales of Chinese goods to the U.S. This possible impact on Chinese exports is referred to as:

• A) translation exposure.
• B) transaction exposure.
• C) economic exposure.
• D) accounting exposure.

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Definitions:

Usage of Trade

Refers to the customs and practices commonly observed and accepted in a particular industry or trade.

Parol Evidence Rule

A legal principle that prohibits the introduction of oral or extrinsic evidence to alter or contradict the terms of a written contract.

Specific Provisions

Special clauses in a contract or law that are designed to cover particular details and scenarios, differing from general provisions.

Oral Contract

A verbal agreement between parties that is legally binding, provided it meets all requirements of a valid contract.