Which of the Following Foreign Currency Transactions Would Be Included

question 7

Multiple Choice

Which of the following foreign currency transactions would be included in the equity section of a U.S.firm along with the cumulative translation adjustments?

• A)​Those used to hedge a net investment in a foreign entity
• B)​Those used to speculate in foreign exchange rates
• C)​Those used to hedge an exposed asset or liability position
• D)​Those used to hedge a future foreign currency commitment

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Definitions:

Factories

Large buildings or complexes where goods are manufactured or assembled predominantly by machines and workers.

Equipment

The set of tools, machinery, and other apparatus necessary for the manufacture of goods or the provision of services, often considered as part of capital investment in economic analyses.

Trade Deficit

A situation where a country's imports of goods and services exceed its exports, resulting in a negative balance of trade.

Aggregate Income

The total income earned by all factors of production in an economy, including wages, rent, interest, and profits.