If a U.S. company exports to Canada and the sale is denominated in Canadian dollars,which of the following is true?
A) The U.S. company would report a gain if the U.S. dollar rises against the Canadian dollar.
B) The Canadian company would report a gain if the Canadian dollar falls against the U.S. dollar.
C) The U.S. company would report a loss if the Canadian dollar falls against the U.S. dollar.
D) Exports do not result in a gain or loss.

Question

Quizplus · Accepted Answer

If the Canadian dollar falls against the U.S. dollar, the U.S. company receives less in U.S. dollar terms when converting the Canadian dollar payment, resulting in a loss.

If a US Company Exports to Canada and the Sale Is Denominated