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8. Under the Current rate method of translations the foreign exchange gains and losses are reflected in a separate equity account and, thus, they do not affect companys earnings.

• True
• False

9. Under the Temporal method of translations the foreign exchange gains and losses are usually lower then under the Current Rate Method

• True
• False

10. How can managers reduce the translation exposure of a company?

Reduce Net Exposed Assets

Increase Exposed Assets

Increase net exposed Assets

Reduce Exposed Liability

12. To take advantage of expect foreign currency appreciation, the manager should try to:

Maximize Net Exposed Assets

Increase Exposed Liabilities

Decrease Exposed Assets

Minimized Net Exposed Asset