If a firm conducts transactions in a foreign currency and the value of that currency declines,the firm's revenues will
A)increase.
B)not be affected.
C)be reduced.
D)increase or decrease depending on the value of the firm's domestic currency.

Question

Quizplus · Accepted Answer

When a firm conducts transactions in a foreign currency and the value of that currency declines, the firm's revenues will be reduced because the foreign currency will be worth less in the firm's domestic currency. This means that the firm will receive fewer domestic currency units for the same amount of foreign currency revenue.

If a Firm Conducts Transactions in a Foreign Currency and the Value