When a US Company Purchases Parts from a Foreign Company, Which of Which

question 10

Multiple Choice

When a U.S. company purchases parts from a foreign company, which of the following will result in zero foreign exchange gain or loss?

• A) The transaction is denominated in U.S. dollars.
• B) The option strike price to sell foreign currency is less than the spot rate of the currency.
• C) The option strike price to buy foreign currency is less than the spot rate of the currency.
• D) The foreign currency appreciated in value relative to the U.S. dollar.
• E) The foreign currency depreciated in value relative to the U.S. dollar.

---

Definitions:

Ancillary Agreements

Additional agreements that are ancillary to a main agreement, providing for supplementary details and obligations not covered in the primary contract.

Employment Contracts

Legal agreements specifying the terms and conditions of employment between an employer and employee.

Indivisible Agreement

A contract or agreement that cannot be separated into individual parts, requiring full performance by the parties involved.

Separate Consideration

The distinct value or compensation given in exchange for a service or agreement, specifically identifiable apart from other considerations.