A United States based company that has not hedged an exposed asset position would experience an exchange gain if

Question

Quizplus · Accepted Answer

If a US-based company has not hedged an exposed asset position and the spot rates increase, it would experience an exchange gain. This is because the value of foreign currency that the company holds has increased in relation to the US dollar. The other choices, such as decreasing forward rates or spot rates would not result in an exchange gain for the company that has not hedged.

A United States Based Company That Has Not Hedged an Exposed