Which of the following operations benefit(s) from depreciation of the firm's local currency?
A)borrowing in a foreign country and converting the funds to the local currency prior to the depreciation
B)purchasing foreign supplies
C)investing in foreign bank accounts denominated in foreign currencies prior to depreciation of the local currency
D)A and B

Question

Quizplus · Accepted Answer

Depreciation of the firm's local currency benefits operations that involve holding assets or receiving revenues in a stronger foreign currency. Investing in foreign bank accounts denominated in foreign currencies prior to the depreciation of the local currency would result in gains when converting back to the now weaker local currency.

Which of the Following Operations Benefit(s) from Depreciation of the Firm's