Question
BobSalyer (BS) Inc. is a U.S. exporter of high tech accounting software. The company expects to receive GBP 50,000 one year from now from one
BobSalyer (BS) Inc. is a U.S. exporter of high tech accounting software. The company expects to receive GBP 50,000 one year from now from one of their clients in London. During the year the USD/GBP spot rate goes from X0USD/GBP = 1.32 to X1USD/GBP = 1.15. Which of the following two statements is correct?
S1: BS Inc. loses USD 10,500 because of the weakening of the GBP.
S2: The USD appreciates by 14.78% against the GBP.
Both statements are correct
S2 is correct but S1 is false
S1 is correct but S2 is false
Both statements are false
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The Evolution Of Nordic Finance
Authors: Steffen Elkiær Andersen
2011th Edition
0230241557, 978-0230241558
