On a Given Day, the Exchange Rate for One U

question 69

Multiple Choice

On a given day, the exchange rate for one U.S.dollar is 1.2 Canadian dollars and 0.5 British pounds.Exactly six months later, the exchange rate for one U.S.dollar is 1.1 Canadian dollars and 0.7 British pound.From the information given, we can say:

• A)the dollar has appreciated relative to Canadian dollars and depreciated relative to British pounds.
• B)the dollar has appreciated relative to British pounds and depreciated relative to Canadian dollars.
• C)the dollar has appreciated relative to both British pounds and Canadian dollars.
• D)the dollar has depreciated relative to both British pounds and Canadian dollars.
• E)nothing about the relative value of the U.S.dollar.

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Definitions:

Fixed Expenses

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Expenses

These are costs that change in proportion to the activity of a business.

Discontinue Product

The decision to stop producing and selling a specific product due to factors like poor sales, obsolescence, or strategic realignment.

Net Operating Income

This refers to a company's income after operating expenses are deducted, but before interest and taxes are subtracted.