The Impact of Financing in Determining the Functional Currency

question 56

Multiple Choice

The impact of financing in determining the functional currency

• A)financing does not impact the choice of functional currency due to the integrated nature of capital markets.
• B)if the financing of the foreign entity is primarily denominated in the foreign currency and the debt service obligations are normally handled by the foreign entity, the functional currency is the foreign currency.
• C)if the financing of the foreign entity is primarily from the parent, with debt service obligations normally handled by the parent, the functional currency is the home currency.
• D)both b) and c)

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Definitions:

Requests

Expressions or acts of asking for something, typically in a formal or polite manner.

Positive Words

Terms and phrases that invoke constructive, optimistic, and encouraging connotations, used to uplift and motivate.

Late Payment

A financial term referring to the failure to meet the due date for a payment.

Official Capacity

The function or role that a person holds in an organization or as part of their formal job responsibilities.