​When a US

question 37

Multiple Choice

​When a U.S. firm borrows a foreign currency and has no offsetting position in this currency, it will incur an effective financing rate that is always above the ____ if the currency ____.

• A) ​foreign currency's interest rate; appreciates
• B) ​foreign currency's interest rate; depreciates
• C) ​domestic interest rate; depreciates
• D) ​domestic interest rate; appreciates

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Definitions:

Accounting System

The methods and procedures used by a business to collect, classify, summarize, and report financial data for use by management and external users.

Voucher

A document representing an internal intent to make a payment to an external entity, detailing the specifics of the transaction.

Liability

A financial obligation or amount owed by a business to others, such as loans, accounts payable, or mortgages.

Money Orders

A payment order for a pre-specified amount of money; it functions as a form of prepaid payment instrument.