The key issue related to translation exposure is:
A) the local interest rates.
B) what method to use for the translation, current rate or temporal.
C) strategic planning.
D) A and C.
Economic exposure results from:
A) exchange rate variations on projected cash flows.
B) operating exposure.
C) A and B.
D) poor planning.
Whether the functional currency is local or the parent company's currency, owner's equity is always translated at:
A) the rate in effect when the stock was issued.
B) the rate in effect the day of the consolidation.
C) the rate in effect the day of the journal entry.
D) the method of the company's choice, but consistency is required.
Regardless of the functional currency, retained earnings are translated at:
A) their market value based on recent stock price.
B) the rate in effect when the earnings were posted.
C) the rate in effect the day of consolidation.
D) a reasonable rate of the company's choice.