1. Which of the following operations benefits from depreciation of the firm’s local currency?
A) Borrowing in a foreign country and converting the funds to the local currency prior to the depreciation.
B) Purchasing foreign supplies.
C) Investing in foreign bank accounts denominated in foreign currencies prior to depreciation of the local currency.
D) Borrowing in a foreign country and converting the funds to the local currency prior to the depreciation AND purchasing foreign supplies.
2. Which of the following operations benefits from appreciation of the firm’s local currency?
A) Borrowing in a foreign currency and converting the funds to the local currency prior to the appreciation.
B) Receiving earnings dividends from foreign subsidiaries.
C) Purchasing supplies locally rather than overseas.
D) Exporting to foreign countries.