Which of the following statements is TRUE?
A)The historical rate is the exchange rate at the date of the transaction and the closing rate is the exchange rate at the end of the reporting period.
B)The historical rate is the exchange rate at the beginning of the reporting period and the closing rate is the exchange rate at the end of the reporting period.
C)The historical rate is the exchange rate at the beginning of the reporting period and the forward rate is the exchange rate at the end of the reporting period.
D)The spot rate is the exchange rate at the date of the transaction and the closing rate is the exchange rate at the conclusion of a hedge instrument.

Question

Quizplus · Accepted Answer

The historical rate refers to the exchange rate at the date of the transaction, and the closing rate is indeed the exchange rate at the end of the reporting period. This distinction is important in accounting for transactions in foreign currencies and translating foreign operations for financial reporting.

Which of the Following Statements Is TRUE