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this in internional finance ... could you please solve it ? Tea Inc. is using the current rate method for translation. a. The European subsidiary

this in internional finance ... could you please solve it ?

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Tea Inc. is using the current rate method for translation. a. The European subsidiary of Tea Inc. has exposed assets of Element 760,000 an exposed liabilities of Element500,000. If the exchange rate moved from exist1.06/Element to exist1.09/Element, whats the amount of translation gain or loss? Will this gain or loss be recognized during the reporting period? Please specify the impact on consolidated financial statements. b. Is it possible to have a complete balance sheet hedge against the translation exposure? Why? c. The CFO of Tea Inc. would like to decrease the net exposed assets to decrease the impact of translation exposure. Please help develop two simple strategies for the CFO. The first one should be related to the total exposed assets while the second one should be related to the total exposed liabilities

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