You Are Made Better Off in Which of the Following

question 69

Multiple Choice

You are made better off in which of the following situations?

• A)you borrow 10,000 pesos,you earn income in dollars,the dollar depreciates against the peso,you must pay back the loan in pesos
• B)you borrow $10,000,you earn income in pesos,the dollar depreciates against the peso,you must pay back the loan in dollars
• C)you borrow $10,000,you earn income in pesos,the dollar appreciates against the peso,you must pay back the loan in dollars
• D)you borrow 10,000 pesos,you earn income in pesos,the dollar depreciates against the peso,you must pay back the loan in pesos

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Definitions:

Credit Balance

A situation where the total credits in an account exceed the total debits; it's common in liability, revenue, and equity accounts.

Risk Assessment

The process of identifying and evaluating potential risks that could negatively affect the achievement of objectives.

Internal Control

Procedures and policies implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Debt Investments

Investments made in securities that require the issuer to repay the principal along with interest.