If a foreign currency is expected to depreciate with respect to the home currency,the holder of a net liability in foreign currency will profit.

Question

Quizplus · Accepted Answer

When a foreign currency depreciates, it becomes less valuable compared to the home currency. This means that the holder of a net liability in foreign currency will have to pay back less of the home currency to settle the liability, resulting in a profit.

If a Foreign Currency Is Expected to Depreciate with Respect