If USAssets Are Seen as Having Greater Risk Relative to Foreign

question 55

Multiple Choice

If U.S.assets are seen as having greater risk relative to foreign assets in the market for foreign exchange, this should cause:

• A)The demand for dollars to increase
• B)The supply of dollars to decrease
• C)The supply of dollars to increase
• D)The dollar to appreciate

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Definitions:

Goodwill

An intangible asset that arises when a business is purchased for more than the fair value of its net identifiable assets.

Acquisition

The process by which a company purchases most or all of another company's shares or assets, in order to take control or ownership of that company.

Fair Value

The cost expected to be received for an asset sale or to be paid for transferring a liability during a well-organized interaction between market actors as of the valuation moment.

Subsidiary's Equity

The portion of equity (capital and reserves) in a subsidiary company that is attributable to its owners, including both parent and non-controlling interests.