Yomance Co. is a U.S. company that has exposure to Japanese yen and British pounds. It has net inflows of 5,000,000 yen and net outflows of 60,000 pounds. The present exchange rate of the Japanese yen is $.012 while the present exchange rate of the British pound is $1.50. Yomance Co. has not hedged its positions. The yen and pound movements against the dollar are highly and positively correlated. If the dollar strengthens, then Yomance Co. will:

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The dollar value of the yen position is 5,000,000 * 0.012 = $60,000. The dollar value of the pound position is 60,000 * 1.50 = $90,000. If the dollar strengthens, the yen and pound will weaken, which will increase the dollar value of the yen position and decrease the dollar value of the pound position. Since the dollar value of the pound position is greater than the dollar value of the yen position, Yomance Co. will benefit from the strengthening dollar.