Multiple Choice
Suppose Stackpool Inc.had inventory in Britain valued at 240,000 pounds one year ago.The exchange rate for dollars to pounds was 1£ = 2 U.S.dollars.This year the exchange rate is 1£ = 1.82 U.S.dollars.The inventory in Britain is still valued at 240,000 pounds.What is the gain or loss in inventory value in U.S.dollars as a result of the change in exchange rates?
A) -$240,000
B) -$43,200
C) $0
D) $43,200
E) $47,473
Correct Answer:
Verified
Correct Answer:
Verified
Q4: When the value of the U.S.dollar appreciates
Q7: LIBOR is an acronym for London Interbank
Q11: The United States and most other major
Q14: Suppose 90-day investments in Britain have a
Q24: The cost of capital may be different
Q29: Tashakori Trucking, a U.S.-based company, is considering
Q35: A foreign currency will, on average, depreciate
Q39: Suppose Yates Inc., a U.S.exporter, sold a
Q44: Exchange rate risk is the risk that
Q47: If an investor can obtain more of