When a foreign subsidiary's assets are _______ than its liabilities,if the foreign currency value appreciates for the country in which the foreign subsidiary operates,_______ will occur.
A) greater; currency exchange gains
B) greater; currency exchange losses
C) less; nothing
D) greater; nothing

Question

Quizplus · Accepted Answer

If a foreign subsidiary's assets are greater than its liabilities, it means that the subsidiary has a positive net worth. Thus, if the foreign currency value appreciates, the subsidiary's assets will be worth more in the parent company's currency, resulting in currency exchange gains.

When a Foreign Subsidiary's Assets Are _______ Than Its Liabilities,if