Define short exposure and explain the relationship between the variability of the domestic currency value and the variability of the exchange rate?

Q: critically discuss main causes of exchange rate volatility in the foreign exchange markets. Please…

A: Exchange rate volatility- It refers to the tendency of a currency of one country  to appreciate or…

Q: the reporting of FX. What are the major differences in foreign currency accounting standards between…

A: Foreign currency Translation In the Foreign currency Translation the determination of functional…

Q: Under a flexible exchange rate system, an increase in the value of the U.S. dollar in terms of other…

A: In exchange rate system, If one currency appreciates, then other currency depreciates.

Q: Which one of the following is not true regarding a currency board? Currency board holds…

A: Currency board is one of the way to manage the exchange rate and foreign currency and supply of…

Q: Explain, why appreciation of exchange rate (E) today results in the increase of expected return from…

A: The question is based on the concept of impact of change in exchange rate on net return in…

Q: The factor used to convert from one country's currency to another country's currency  is called the:…

A: A) Interest rate - Interest rate is the rate at which return on an investment is to be earned or the…

Q: Under the fixed exchange rate system, what was the currency against whichall other currency values…

A: Answer: Foreign exchange rate is the currency exchange rate system in which a country’s central bank…

Q: Give a detailed explanation of whether the following statement is true or false Call-put parity…

A: A portfolio consisting of a long put option and a short call option should be equivalent to a…

Q: Under a flexible exchange rate system, a decrease in the value of a domestic currency in terms of…

A: Under a flexible exchange rate system, a decrease in the value of a domestic currency in terms of…

Q: What is the subsequent measurement of foreign currency denominated nonmonetary items?

A: Non-monetary items denominated in foreign currencies that are measured at fair value are…

Q: In what way is the accounting for a foreign currency borrowing more complicated than the accounting…

A: The accounting for a foreign currency borrowing involves keeping track of two foreign currency…

Q: What concept underlies the two-transaction perspective in accounting for foreign currency…

A: Foreign Exchange Transaction:   It is a transaction involving two or more currencies where one…

Q: Assume that interest rate parity holds. When a currency trades at a forward premium,what does that…

A: When trading of currency is at forward premium, A situation where the currency’s forward price is…

Q: What is the initial measurement of foreign currency transaction? Closing rate for both monetary…

A: Foreign Currency Transaction: It occurs when a company makes a transaction that is denominated in a…

Q: Which of the following factors influences the spread between forward and spot rates? a. which…

A: Spot rate is the current rate of the stock or bond or currency and forward rate is the price that is…

Q: What are some of the transactions or activities that results in the demand of foreign currency

A: In an economy or in a country there are different economic and commercial transactions that lead to…

Q: Would exchange rate changes always increase the risk of foreign investment

A: No, it is not necessary that the exchange rate changes always increse the risk of foriegn…

Q: Which of the following statement is NOT true regarding a foreign currency transaction?   a. When a…

A: b. If an FC transaction is unsettled at the end of the accounting period, the exchange gains/losses…

Q: e the real exchange rate is constant – say, at the level required for net exports (or the current…

A: Nominal exchange rate includes the exchange rate after consideration of inflation and real exchange…

Q: How are spot exchange rates determined? Multiple Choice predicting future currency movements in…

A: Spot exchange rate is the current market price of echanging one perticular currencyin another…

Q: Exchange rates can move up or down, and spot rates could move favourably as well as adversely.…

A: Currencies constantly rise and fall, thus imposing risk to importers, exporters and local industries…

Q: All of the following typically tend to be short-term determinants of exchange rates between currency…

A: Exchange Rate: The value of a nation's currency in relation to the currency of another country or…

Q: What is the effect on a country’s economy of an artificially lowexchange rate? Of an artificially…

A: An exchange rate is the money of one country versus another country's or economic zone's currency.

Q: What is the subsequent measurement of foreign currency denominated monetary items Closing rate…

A: Monetary items are those which are in the form of money or can be measured in the form of currency.…

Q: Explain about the hedging against the foreign currency risk.

A: Foreign exchange refers to the trading of currency of one country with the currency of another…

Q: Of what relevance is the Settlement Concept of Surplus/Deficit of countries operating Fixed or…

A: Surplus:- The quantity of an item or resource that is not actively used is referred to as a surplus.…

Q: exchange rate regime,

A: The exchange rate refers to the price of the money of a country and relates to the value of…

Q: Discuss the condition under which exchange rate changes may actually reduce the risk of foreign…

A: Exchange rate changes are largely unpredictable. Exchange rates are nonstationary and may deviate…

Q: From your understanding, discuss the advantages and disadvantages of a fixed change rate regime.…

A: The fixed exchange rate regime is an exchange rate that is determined by the government and it will…

Q: Why the single currency eliminates exchange rate fluctuation and why is better for the countries to…

A: Single Currency refers to the currency used by more than one country. In other words, when more than…

Q: llustrate the different factors that determine future foreign exchange rates in the long run

A: The question is based on the concept of determination and determinants of foreign exchange rate  in…