Harmony is a South African mining company that exports 20,000 ounces of gold to the US. Gold exports are priced in dollars but Harmonys workers are paid in rand (rand is the South African currency). The current price of gold is $1,700 an ounce. The current exchange rate is 17.61 rand (R) per $1. Harmonys current mining costs are R14,000 per ounce. Expected one-year inflation rates are 1% in the U.S. and 5% in South Africa.

Would Harmony's profits be positively or negatively affected by rand appreciation against the US dollar?

Group of answer choices

positively

negatively