A Person Holding Dollar Deposits During the Devaluation of the Dollar

question 66

Multiple Choice

A person holding dollar deposits during the devaluation of the dollar would

• A) enjoy a monetary gain.
• B) see the foreign currency value of dollar assets increase by the amount of the exchange rate change.
• C) shift their wealth into domestic investments.
• D) suffer a monetary loss and see the foreign currency value of dollar assets decrease by the amount of the exchange rate change.
• E) see no change in their investments.

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Definitions:

Price-Earnings Ratio

A valuation metric that compares a company's current share price to its per-share earnings.

Return On Total Assets

A financial ratio that indicates how effectively a company is using its assets to generate profit, measured by dividing net income by total assets.

Earnings Per Share

This is a financial ratio that measures the amount of net income earned per share of stock owned.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company in generating sales from its assets, calculated by dividing total revenue by average total assets.