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DEF Inc.is a Japanese firm that sells a majority of its products in Singapore.  If the Japanese...

DEF Inc.is a Japanese firm that sells a majority of its products in Singapore.  If the Japanese yen depreciates relative to the Singapore dollar, the value of DEF will appreciate, all else being equal.

True or False ?

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Answer #1

The given statement is TRUE.

Majority of the earning of Japanese firm is from selling of majority of the product in Singapore so it will have Singapore dollar as receivables, and any fall in Japanese yen in respect to Singapore dollar will be leading to INCREASE in its overall value because it has most of the receivables in Singapore dollar.

Hence, fall in Japanese Yen in respect to Singapore Dollar will be leading to increase in the value of firm because of most of receivables in Singapore dollars.

Given statement is TRUE.

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