ABB Bank is a financial corporation located in England and uses euro as its official currency. The company borrows 1 million U.S. dollars from a bank based in United States. ABB will be at a disadvantage if the:

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Movements in foreign exchange rates can substantially increase the cost of foreign currency loans. In this case, the cost of the loan will go up if the U.S. dollar appreciates against the euro. This will be disadvantageous to ABB Bank.

ABB Bank Is a Financial Corporation Located in England and Uses