When a U.S.-based company holds a receivable denominated in a foreign currency, the U.S. company wants the foreign currency to ________ against the U.S. dollar so that the foreign currency can be converted into ________.
A)weaken; fewer dollars
B)weaken; more dollars
C)strengthen; fewer dollars
D)strengthen; more dollars

Question

Quizplus · Accepted Answer

When a U.S.-based company holds a receivable in a foreign currency, it benefits if the foreign currency strengthens against the U.S. dollar. This means that when the foreign currency is converted, it will result in more U.S. dollars.

When a US-Based Company Holds a Receivable Denominated in a Foreign Currency