The direct effect of currency volatility on a firm can be seen in:
A)the other firms that it contracts with and the terms of those contracts.
B)analyzing the countries where it does business.
C)its accounting record and formal contracts.
D)considering the country that it elects to consider its headquarters.

Question

Quizplus · Accepted Answer

Currency volatility can directly impact a firm's accounting records and formal contracts, particularly those denominated in foreign currency. Fluctuations in exchange rates can lead to gains or losses in translation and can affect the value of assets and liabilities. Therefore, firms need to pay close attention to the impact of currency volatility on their financial statements and accounting practices.

The Direct Effect of Currency Volatility on a Firm Can