Match the items of List I with the items of List II and choose the correct answer from the code given…
A floating foreign exchange rate regime triggers currency appreciation or depreciation (a-iv); the translation (accounting) effect influences the home-currency valuation of…
Choose your answer
Match the items of List I with the items of List II and choose the correct answer from the code given below.
List I
a) Floating forex rate
b) Translation effect of change in forex rate
c) Transaction effect of change in forex rate
d) Geocentric solution in financial and planning control.
List II
i) Get the best out of extreme centralistaion and decentralization in finance decision and execution
ii) Influences time lag in receipt of cash against foreign currency dominated invoices
iii) Influences the valuation of financial statements and reported items
iv) Triggers problems of appreciation or depreciation of currencies.
Answer and explanation
Correct answer A
A floating foreign exchange rate regime triggers currency appreciation or depreciation (a-iv); the translation (accounting) effect influences the home-currency valuation of consolidated financial statement items (b-iii); the transaction effect influences cash receipts/payments on foreign-currency-denominated invoices (c-ii); and a geocentric financial control approach balances centralization and decentralization globally (d-i).
Practice for these exams
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UGC NET Management