A U.S.company that has sold its product to a German firm would be exposed to a net exchange gain on the unpaid receivable if the

Question

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If the dollar weakened relative to the Euro (i.e, exchange rate increased), and the Euro was the denominated currency for the receivable, the U.S. firm would receive more dollars upon payment, resulting in a net exchange gain. However, if the dollar strengthened relative to the Euro (i.e, exchange rate decreased), the U.S. firm would receive fewer dollars upon payment, resulting in a net exchange loss. The other options are irrelevant to the scenario described.

A USCompany That Has Sold Its Product to a German Firm