The holder of an asset denominated in a foreign currency would experience _____ when the functional currency appreciates against that foreign currency:
A)an economic gain
B)an economic loss
C)no change in value for that asset
D)only an accounting loss

Question

Quizplus · Accepted Answer

When the functional currency appreciates against a foreign currency, the holder of an asset denominated in that foreign currency would experience an economic loss as the value of the foreign currency asset would decrease in terms of the functional currency.

The Holder of an Asset Denominated in a Foreign Currency