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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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The following spot rates for $1 in terms of yen and pounds were in effect for June 1 and November 1.

Chapter 13, Problem 17MCQ, The following spot rates for 1 in terms of yen and pounds were in effect for June 1 and November 1. , example  1

Did the U.S. dollar appreciate or depreciate against these currencies between June 1 and November 1?

Chapter 13, Problem 17MCQ, The following spot rates for 1 in terms of yen and pounds were in effect for June 1 and November 1. , example  2

To determine

Identify the correct option depicting dollar appreciation or depreciation against the given currencies.

Explanation

Exchange Rate:

Exchange rate is a rate at which currencies of two countries can be exchanged. Exchange rates can be quoted directly or indirectly.

b.

On 1st June, $1 is equal to 115 yen and on 1st November, $1 is equal to 118 yen. Since, more yen is required to equate with $1, this indicates that dollars appreciated against yen.

On 1st June, $1 is equal to 0.699 pound and on 1st November, $1 is equal to 0.650 pound. Since, lesser pounds would be available in exchange of $1; this indicates that dollars depreciated against pound.

Therefore, this is the correct option...

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