A U.S. company buys merchandise from a foreign company denominated in U.S. dollars. Which of the following statements is true?

Multiple Choice

• If the foreign currency appreciates, a foreign exchange loss will result.
• No foreign exchange gain or loss will result.
• Any gain or loss will be included in comprehensive income.
• If the foreign currency depreciates, a foreign exchange gain will result.
• If the foreign currency appreciates, a foreign exchange gain will result.