The risk to a Canadian importer with foreign currency denominated accounts payable is that the dollar will
A) appreciate.
B) depreciate.
C) remain unchanged.
D) there is no risk to a Canadian importer in this situation

Question

Quizplus · Accepted Answer

If the Canadian dollar depreciates, it will take more Canadian dollars to pay off the foreign currency denominated accounts payable, increasing the importer's costs. Therefore, there is a risk to a Canadian importer with foreign currency denominated accounts payable if the Canadian dollar depreciates.

The Risk to a Canadian Importer with Foreign Currency Denominated