Question

In which of the following scenarios does the firm benefit from the Euro (EUR) depreciating against the US Dollar (USD)?

A. A US firm expects to receive 10 million Euros in one month

B. A US corporation needs to make a principal payment on a 2 million Euro loan next week.

C. None of the above

D. All of the above

E. A US firm is planning to sell a machine to a European supplier next year

Answer 1

  

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An importer will always be benefitted from the foreign currency deprciating as they will have to pay and in exporter will always be benefitted from the domestic currency depriciation.

Here depriciating EURO will benefit the importer or basically a person who has to make payment in foreign currency.

Option B is correct.

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