A US Company Buys Merchandise from a Foreign Company Denominated in in the Foreign

question 12

Multiple Choice

A U.S. company buys merchandise from a foreign company denominated in the foreign currency. Which of the following statements is true?

• A) If the foreign currency appreciates, a foreign exchange gain will result.
• B) If the foreign currency depreciates, a foreign exchange loss will result.
• C) No foreign exchange gain or loss will result.
• D) If the foreign currency appreciates, a foreign exchange loss will result.
• E) Any gain or loss will be included in comprehensive income.

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Definitions:

Specific Target Point

A clearly defined goal or objective that one party aims to achieve in a negotiation or a set of negotiations.

Resistance Point

The resistance point is the threshold in negotiations beyond which a party will not go; it represents the worst acceptable outcome.

Opening Bid

The initial proposal or offer made by one party to another at the beginning of a negotiation process.

Types of Goals

Various categories or classifications of objectives that individuals or organizations strive to achieve.