Which Statements Are True? If the Exchange Rate Changes from C$1

question 128

Multiple Choice

Which statements are true? If the exchange rate changes from C$1 = US$0.90 to C$1 = US$1.10, then the:
1) Canadian dollar depreciated against the U.S. dollar.
2) Canadian dollar appreciated against the U.S. dollar.
3) U.S. dollar depreciated against the Canadian dollar.
4) U.S. dollar appreciated against the Canadian dollar.

• A) 1 and 3
• B) 1 and 4
• C) 2 and 3
• D) 2 and 4
• E) 2 only

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Definitions:

AMTI

Alternative Minimum Taxable Income, which is calculated to ensure that taxpayers with large amounts of deductions, exemptions, and exclusions still pay a minimum amount of tax.

AMT Depreciation

Depreciation methods and rates that apply for the Alternative Minimum Tax, a parallel tax system to ensure certain taxpayers pay a minimum amount of tax.

Regular Tax Depreciation

A deduction that allows taxpayers to recover the cost of property used in a business or held for the production of income, computed under the regular tax system.

Real Property

Land and anything permanently attached to it, such as buildings and structures, classified as immovable by law.