Revenue from a foreign subsidiary will be smaller in U.S. dollars when the dollar strengthens relative to the foreign currency.

Question

Quizplus · Accepted Answer

When the U.S. dollar strengthens relative to a foreign currency, it means that each dollar can buy more of the foreign currency. Therefore, when converting the revenue earned in the foreign currency back to U.S. dollars, the amount will be smaller because the stronger dollar decreases the foreign currency's value in dollar terms.

Revenue from a Foreign Subsidiary Will Be Smaller in U