28689024-p2-Foreign-Currency-Translation
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28689024-p2-Foreign-Currency-Translation

Course Number: ACC 452, Spring 2010

College/University: Abraham Baldwin...

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GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT B. On a retroactive basis. RISK MANAGEMENT D. Only at the year-end balance sheet date. SFAS 52, FOREIGN CURRENCY TRANSLATION Basic Concepts 1 . Prior to SFAS 52, there was significant disagreement among informed observers regarding the basic nature, information content, and meaning of results produced by various methods of translating...

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CMA/CFM GLEIMS TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT B. On a retroactive basis. RISK MANAGEMENT D. Only at the year-end balance sheet date. SFAS 52, FOREIGN CURRENCY TRANSLATION Basic Concepts 1 . Prior to SFAS 52, there was significant disagreement among informed observers regarding the basic nature, information content, and meaning of results produced by various methods of translating amounts from foreign currencies into the reporting currency. SFAS 52 directs that organizations A. Change the accounting model to recognize currently the effects of all changing prices in the primary statements. B. Defer any recognition of changing currency prices until they are realized by an actual exchange of foreign currency into the reporting currency. C. Recognize currently the effect of changing currency prices on the carrying amounts of designated foreign assets and liabilities. D. Recognize currently the effect of changing currency prices on the carrying amounts of all foreign assets, liabilities, revenues, expenses, gains, and losses. CMA 1291 2-6 Transaction Gains and Losses 2 . FASB 52, Foreign Currency Translation, defines foreign currency transactions as those denominated in other than an entity's functional currency. Transaction gains and losses are reported as A. Extraordinary items. B. Adjustments to the beginning balance of retained earnings. C. A component of equity. D. A component of income from continuing operations. CMA 0687 3-6 3. 5. According to SFAS 52, foreign currency transaction gains and losses should usually be included in income A. For the period in which the exchange rate changes. B. For the period in which the transaction originated. C. For foreign currency transactions that are designated as economic hedges of a net investment in a foreign entity. CMA 1288 3-30 D. For intercompany foreign currency transactions that are of a long-term investment nature. 6. At December 15, 1999 purchase of goods was in a currency other than the entitys functional currency. The transaction resulted in a payable that was fixed in terms of the amount of foreign currency, and was paid on the settlement date, January 20, 2000. The exchange rate between the functional currency and the currency in which the transaction was denominated changed between the transaction date and December 31, 1999, and again between December 31, 1999 and January 20, 2000. Both exchange rate changes resulted in gains. The amount of the gain that should be included in the 2000 financial statements is A. The gain from December 31, 1999 to January 20, 2000. B. The gain from December 15, 1999 to January 20, 2000. C. The gain from December 15, 1999 to December 31, 1999. D. Zero. AICPA, Adapted On October 1, 2000, Mild Co, a U.S. company, purchased machinery from Grund, a German company, with payment due on April 1, 2001. If Milds 2000 operating income included no foreign currency transaction gain or loss, the transaction could have A. Resulted in an extraordinary gain. B. Been denominated in U.S. dollars. AICPA, Adapted C. Caused a foreign currency gain to be reported as a contra account against machinery. D. Caused a foreign currency translation gain to be reported in other comprehensive income. 7. Fogg Co., a U.S. company, contracted to purchase foreign goods. Payment in foreign currency was due one month after the goods were received at Foggs warehouse. Between the receipt of goods and the time of payment, the exchange rates changed in Foggs favor. The resulting gain should be included in Foggs financial statements as a(n) A. Component of income from continuing operations. B. Extraordinary item. C. Deferred credit. D. Item of other comprehensive income. AICPA, Adapted 4. SFAS 52 states that transaction gains and losses have direct cash flow effects when foreigndenominated monetary assets are settled in amounts greater or less than the functional currency equivalent of the original transactions. These transaction gains and losses should be reflected in income CMA 1291 2-5 A. At the date the transaction originated. C. In the period the exchange rate changes. CHIANG KAI SHEK COLLEGE Forex Transactions 22. The exchange rate of one currency for another for immediate delivery is the a. forward rate c. spot rate b. hedging rate d. immediate rate H&M 30. On February 1 Classic Imports, a U.S. company, received an order worth 50,000 British pounds, to be received in 60 days. If the dollar weakened against the British pound throughout February and March, Classic Imports would have a(n) Page 1 of 16 GLEIMS CMA/CFM TEST PREP 4.0 a. exchange gain b. exchange loss PART 2CFM CORPORATE FINANCIAL MANAGEMENT c. no gain or loss d. advance pricing agreement H&M RISK MANAGEMENT 31. On February 1, Classic Imports, a U.S. company, received an order worth 50,000 British pounds, to be received in 60 days. If the dollar weakened against the British pound throughout February and March, the British firm would have a(n) a. exchange gain c. no gain or loss b. exchange loss d. advance pricing agreement H&M 32. On March 1, Groves, Inc., a U.S. company, received an order from a Japanese customer for 100,000 yen to be received in 90 days. If the dollar strengthened against the yen throughout March, April, and May, Groves would have a(n) a. exchange gain c. no gain or loss b. exchange loss d. advance pricing agreement H&M 33. On March 1, Groves, Inc., a U.S. company, received an order from a Japanese customer for 100,000 yen to be received in 90 days. If the dollar strengthened against the yen throughout March, April, and May, the Japanese firm would have a(n) a. exchange gain c. no gain or loss b. exchange loss d. advance pricing agreement H&M 35. Ferguson, Inc. purchased production equipment from a German company, agreeing to pay 100,000 Deutsche marks in one month. If the dollar weakened relative to the Deutsche mark before payment was made, Ferguson would have a(n) a. exchange gain c. no gain or loss b. exchange loss d. advance pricing agreement H&M 36. Ferguson, Inc. purchased production equipment from a German company, agreeing to pay 100,000 Deutsche marks in one month. If the dollar weakened relative to the Deutsche mark before payment was made, the German firm would have a(n) a. exchange gain c. no gain or loss b. exchange loss d. advance pricing agreement H&M 8. LCUs on October 1, December 15, and December 31, 2001, respectively, Velec should account for the exchange rate fluctuation in 2001 as A. A loss included in net income before extraordinary items. B. A gain included in net income before extraordinary items. C. An extraordinary gain. D. An extraordinary loss. AICPA adapted 9. Shore Co. records its transactions in U.S. dollars. A sale of goods resulted in a receivable denominated in Japanese yen, and a purchase of goods resulted in a payable denominated in French francs. Shore recorded a foreign currency transaction gain on collection of the receivable and a transaction loss on settlement of the payable. The exchange rates are expressed as so many units of foreign currency to one dollar. Did the number of foreign currency units exchangeable for a dollar increase or decrease between the contract and settlement dates? Yen Exchangeable for $1 Francs Exchangeable for $1 A. Increase Increase B. Decrease Decrease C. Decrease Increase D. Increase Decrease Translation of a Foreign Subsidiarys Financial Statements Functional Currency 10. The financial statements of a foreign subsidiary are to be measured by use of the subsidiary's functional currency. The functional currency of an entity is defined as the currency of the A. Parent company. B. United States. C. Primary economic environment in which the entity operates. D. Geographic location in which the entity's headquarters are located. CIA 0593 IV-41 11 . On October 1, 2001, Velec Co., a U.S. company, contracted to purchase foreign goods requiring payment in local currency units (LCUs) 1 month after the receipt of the goods at Velecs factory. Title to the goods passed on December 15, 2001. The goods were still in transit on December 31, 2001. Exchange rates were one dollar to 22 LCUs, 20 LCUs, and 21 In preparing consolidated financial statements of a U.S. parent company with a foreign subsidiary, the foreign subsidiarys functional currency is the currency A. In which the subsidiary maintains its accounting records. B. Of the country in which the subsidiary is located. C. Of the country in which the parent is located. D. Of the environment is which the subsidiary primarily generates and expends cash. 12. SFAS 52, Foreign Currency Translation, requires the application of the functional currency concept. Before the financial statements of a foreign subsidiary may be translated into the Page 2 of 16 CHIANG KAI SHEK COLLEGE GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT 15 . RISK MANAGEMENT parent company's currency, the functional currency of the foreign subsidiary must be determined. All of the following factors indicate that a foreign subsidiary's functional currency is the foreign currency rather than the parent's currency except when A. Its cash flows are primarily in foreign currency and do not affect the parent's cash flows. B. Its sales prices are responsive to exchange rate changes and to international competition. C. Its labor, material, and other costs are obtained in the local market of the foreign subsidiary. D. Its financing is primarily obtained from local foreign sources and from the subsidiary's operations. CMA 0697 2-28 13. SFAS 52, Foreign Currency Translation, provides specific guidelines for translating foreign currency financial statements. The translation process begins with a determination of whether a foreign affiliate's functional currency is also its local reporting currency. Which one of the following factors indicates that a foreign affiliate's functional currency is the U.S. dollar? A. Cash flows are primarily in foreign currency and do not affect parent's cash flows. B. Financing is primarily obtained from local foreign sources and from the affiliate's operations. C. Sales prices are responsive to short-term changes in exchange rates and worldwide competition. CMA 0692 2-15 D. Labor, materials, and other costs consist primarily of local costs to the foreign affiliate. 10. Which of the following is the primary factor in determining the functional currency of a foreign subsidiary? a. How the costs for the foreign entity's product are determined b. The denomination of the foreign entity's financing c. The location of the primary sales market that influences the price of the foreign entity's product d. Management's assessment of all relevant factors S, S & S 14 . The financial results and relationships of foreign subsidiaries that are presented in the consolidated financial statements of a U.S.-based parent company should be measured in accordance with the A. Functional currency translation method. B. Current/noncurrent translation method. C. Monetary/nonmonetary translation method. D. Temporal translation method. Gleim Which of the following is not an integral part of the functional currency translation approach? A. The functional currency of each foreign operation must be identified. B. All elements of the financial statements of a foreign operation must be measured in the functional currency. C. If the functional currency of a foreign operation differs from the reporting currency, translation using the current exchange rate method is required. D. The gain or loss arising from translation must be included in the determination of the current periods income. Gleim 16 . Remeasurement 17 . When remeasuring foreign currency financial statements into the functional currency, which of the following items would be remeasured using historical exchange rates? A. Inventories carried at cost. B. Equity securities reported at fair values. C. Bonds payable. D. Accrued liabilities. AICPA, Adapted 18. If an entity's books of account are not maintained in its functional currency, SFAS 52, Foreign Currency Translation, requires remeasurement into the functional currency prior to the translation process. An item that should be remeasured by use of the current exchange rate is A. An investment in bonds to be held until maturity. B. A plant asset and the associated accumulated depreciation. C. A patent and the associated accumulated amortization. D. The revenue from a long-term construction contract. CMA 0692 2-16 19. SFAS 52, Foreign Currency Translation, requires the use of different methods to translate or remeasure foreign currency financial statements. When the foreign affiliate's functional currency is not the reporting currency of the parent (or investor), the A. Current/noncurrent method should be used to translate the foreign affiliate's financial statements. Page 3 of 16 The financial results of three foreign subsidiaries are included along with those of a U.S. parent company in consolidated financial statements. The subsidiaries are distinct and separable from the parent and from each other. If the four operations are conducted in four different economic environments, how many different functional currencies are necessary to measure these operations? A. One. C. Three. B. Two. D. Four. Gleim Functional Currency Translation Approach CHIANG KAI SHEK COLLEGE GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT 24 . RISK MANAGEMENT B. Monetary/nonmonetary method should be used to translate the foreign affiliate's financial statements. C. Temporal method should be used to remeasure the foreign affiliate's financial statements. D. Current exchange rate method should be used to translate the foreign affiliate's financial statements. CMA 1288 3-27 20 . Gains from remeasuring a foreign currency a foreign subsidiarys financial statements from the local currency into its functional currency should be reported A. As a deferred foreign currency transaction gain. B. In other comprehensive income. C. As an extraordinary item, net of income taxes. D. As a part of continuing operations. SFAS 52, Foreign Currency Translation, requires the current rate of exchange to be used for remeasuring certain balance sheet items and the historical rate of exchange for other balance sheet items. An items that should be remeasured using the historical exchange rate is A. Accounts and notes receivable. C. Taxes payable. B. Accounts and notes payable. D. Prepaid expenses. CMA adapted If all assets and liabilities of a firms foreign subsidiary are translated into the parents currency at the current exchange rate (the rate in effect at the date of the balance sheet), the extent of the parent firms translation gain or loss is based on the subsidiarys A. Current assets minus current liabilities. B. Total assets minus total liabilities. C. Monetary assets minus monetary liabilities. D. Operating cash flows. CIA adapted 21 . Translation Gain or Losses 22. When restating financial statements originally recorded in a foreign currency, A. Income taxes are ignored in calculating and disclosing the results of foreign currency translations. B. A component of annual net income, "Adjustment from Foreign Currency Translation, should be presented in the notes to the financial statements or in a separate schedule. C. The aggregate transaction gain or loss included in net income should be disclosed in the financial statements or in the notes to the financial statements. D. The financial statements should be adjusted for a rate change that occurs after the financial statement date but prior to statement issuance. CMA 0693 2-21 23 . Foreign Currency Hedge 25 . The functional currency of Nash, Inc.s subsidiary is the French franc. Nash borrowed French francs as a partial hedge of its investment in the subsidiary. In preparing consolidated financial statements, Nashs translation loss on its investment in the subsidiary exceeded its transaction gain on the borrowing. How should the effects of the loss and gain be reported in Nashs consolidated financial statements? a. The translation loss minus the transaction gain is reported in other comprehensive income. b. The translation loss minus the transaction gain is reported in the income statement. c. The translation loss is reported separately in other comprehensive income, and the transaction gain is reported in the income statement. d. The translation loss is reported in the income statement, and the transaction gain is reported in other comprehensive income. AICPA, adapted High Inflationary Economy 26. SFAS 52, Foreign Currency Translation, requires that, in a highly inflationary economy, the financial statements of a foreign entity be remeasured as if the functional currency were the reporting currency. For this requirement, a highly inflationary economy is one that has A. An inflation rate of at least 33% in the most recent past year. B. An inflation rate of at least 50% in the most recent past year. C. An inflation rate of at least 100% in the most recent past year. D. A cumulative inflation rate of at least 100% over a 3-year period. CMA 1288 3-28 27 . Which of the following is debited to other comprehensive income? A. Discount on convertible bonds that are dilutive potential common stock. B. Premium on convertible bonds that are dilutive potential common stock. C. Cumulative foreign currency translation loss. D. Organization costs. AICPA, Adapted For the purpose of remeasuring financial statements of a foreign entity into the functional currency, a highly inflationary economy is considered to be one that has a(n) A. Inflation rate of 100% or more per year for a 3-year period. B. Inflation rate 100% greater than that of the reporting currency for a 3-year period. C. Inflation rate of 100% per year for 3 out of 5 years. D. Cumulative inflation rate of 100% or more over a 3-year period. J. Bruno Page 4 of 16 CHIANG KAI SHEK COLLEGE GLEIMS CMA/CFM TEST PREP 4.0 28 . PART 2CFM CORPORATE FINANCIAL MANAGEMENT Sales to Customers 33 . RISK MANAGEMENT No Yes Yes No When the foreign operations are conducted in a highly inflationary economy, at what exchange rates should the following balance sheet accounts in foreign statements be remeasured into U.S. dollars? AICPA adapted A. B. C. D Equipment Current Current Historical Historical Accumulated Depreciation of Equipment Current Average for year Current Historical A foreign subsidiary of a U.S. parent reports its financial statements in its local currency although its functional currency is the U.S. dollar. In the consolidated financial statements, all of the following accounts of the subsidiary are remeasured into the functional currency at the historical rate except a. Marketable securities carried at cost. c. Property, plant and equipment. b. Inventories carried at market. d. Goodwill. J.W. Mantooth Restating Financial Statements 29. Which foreign currency items are reported exclusively in the equity section of a consolidated balance sheet? A. Foreign currency transaction gains and losses. B. Amounts resulting from translating foreign currency financial statements to U.S. dollars. C. Hedging gains and losses. D. Only items not accounted for in accordance with GAAP. CMA 0688 4-20 30. Unrealized foreign currency gains and losses included in the other comprehensive income section of a consolidated balance sheet represent A. Foreign currency transaction gains and losses. B. The amount resulting from translating foreign currency financial statements into the reporting currency. C. Remeasurement gains and losses. CMA 0688 4-20 D. Accounting not in accordance with generally accepted accounting principles. 31. The economic effects of a change in foreign exchange rates on a relatively self-contained and integrated operation within a foreign country relate to the net investment by the reporting enterprise in that operation. Consequently, translation adjustments that arise from the consolidation of that operation A. Directly affect cash flows but should not be reflected in income. B. Directly affect cash flows and should be reflected in income. C. Do not directly affect cash flows and should not be reflected in income. D. Do not directly affect cash flows but should be reflected in income. Gleim A foreign subsidiarys functional currency is its local currency, which has not experienced significant inflation. The weighted-average exchange rate for the current year is the appropriate exchange rate for translating AICPA adapted A. B. C. D. Wages Expense Yes Yes No No CHIANG KAI SHEK COLLEGE 32 . Foreign Exchange 34. In foreign currency markets, the U.S. dollar will sell at a premium if A. The forward exchange rate in terms of foreign currency units per dollar is lower than the spot rate. B. The forward exchange rate in terms of foreign currency units per dollar is higher than the spot rate. C. Speculators expect the dollar to depreciate. D. The foreign nominal interest rate is lower than the U.S. nominal interest rate. Gleim 35. On foreign currency exchanges, exchange rates are usually stated in A. American terms. B. Direct terms. C. Indirect terms. D. Terms of dollars per unit of foreign currency. 36. The most widely used currency in international business today is the A. United States dollar. C. Japanese yen. B. Euro D. Swiss franc. Gleim CMA 0688 1-21 37. A U.S. company and a German company purchased the same stock on the German stock exchange and held the stock for 1 year. The value of the German mark weakened against the dollar over this period. Comparing the returns of the two companies, the United States company's return will be A. Lower. B. Higher. C. The same. D. Indeterminate from the information provided. CIA 1190 IV-58 Page 5 of 16 GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT RISK MANAGEMENT Forward Exchange Contract 38. If a corporation holds a forward contract for the delivery of U.S. Treasury bonds in 6 months and, during those 6 months, interest rates decline, at the end of the 6 months the value of the forward contract will have A. Decreased. B. Increased. C. Remained constant. D. Any of the answers may be correct, depending on the extent of the decline in interest rates. Gleim 39. For which kind of forward foreign exchange contracts are both the receivable and the liability recorded at the forward exchange rate? A. Speculative forward contract. B. Hedge of a net investment. C. Hedge of an identifiable foreign currency commitment. D. Hedge of an exposed liability position. Gleim 40. A forward contract involves A. A commitment today to purchase a product on a specific future date at a price to be determined some time in the future. B. A commitment today to purchase a product some time during the current day at its present price. C. A commitment today to purchase a product on a specific future date at a price determined today. D. A commitment today to purchase a product only when its price increases above its current exercise price. Gleim 41. The premium or discount on a forward exchange contract is calculated using the difference between the A. Spot rate at the balance sheet date and the spot rate at the date of inception of the forward contract. B. Spot rate at the balance sheet date and the spot rate last used to measure a gain or loss on that contract for an earlier period. C. Spot rate at the date of inception of the forward contract and the spot rate last used to measure a gain or loss on that contract for an earlier period. CMA 1288 3-29 D. Contracted forward rate and the spot rate at the date of inception of the contract. 42. For which kind of forward foreign exchange contracts are both the receivable and the liability recorded at the forward exchange rate? A. Speculative forward contract. B. Hedge of a net investment. C. Hedge of an identifiable foreign currency commitment. D. Hedge of an exposed liability position. Gleim 43. A U.S. company and a German company purchased the same stock on the German stock exchange and held the stock for 1 year. The value of the German mark weakened against the dollar over this period. Comparing the returns of the two companies, the United States company's return will be A. Lower. B. Higher. C. The same. D. Indeterminate from the information provided. CIA 1190 IV-58 44. An American importer of English clothing has contracted to pay an amount fixed in British pounds three months from now. If the importer worries that the U.S. dollar may depreciate sharply against the British pound in the interim, it would be well advised to A. Buy pounds in the forward exchange market. B. Sell pounds in the forward exchange market. C. Buy dollars in the futures market. D. Sell dollars in the futures market. CMA 1285 1-34 45. If the annual U.S. inflation rate is expected to be 5% while the Italian lira is expected to depreciate against the U.S. dollar by 10%, an Italian firm importing from its U.S. parent can expect its lira costs for these imports to A. Decrease by about 10%. C. Increase by about 5%. B. Decrease by about 5%. D. Increase by about 15%. CMA 1286 1-18 46. An overvalued exchange rate A. Represents a tax on exports and a subsidy to imports. B. Represents a subsidy to exports and a tax on imports. C. Has an effect on capital flows but no effect on trade flows. D. Has no effect on capital flows but does affect trade flows. CMA 1286 1-19 47. If the value of the U.S. dollar in foreign exchange markets changes from $1 = 6 marks to $1 = 4 marks, CHIANG KAI SHEK COLLEGE Page 6 of 16 GLEIMS CMA/CFM TEST PREP 4.0 A. B. C. D. PART 2CFM CORPORATE FINANCIAL MANAGEMENT RISK MANAGEMENT The German mark has depreciated against the dollar. German imported products in the U.S. will become more expensive. The dollar has appreciated against the mark. CMA 1287 1-28 U.S. tourists in Germany will find their dollars will buy more German products made. 48. If consumers in Japan decide they would like to increase their purchases of consumer products in the United States, in foreign exchange markets there will be a tendency for A. The supply of dollars to increase. B. The supply of dollars to decrease. C. The Japanese yen to appreciate relative to the U.S. dollar. D. The demand for dollars to increase. CMA 1287 1-29 49. Exchange rates are determined by A. Each industrial country's government. B. The International Monetary Fund. C. Supply and demand in the foreign exchange market. D. Exporters and importers of manufactured goods. 52. Consider a world consisting of only two countries, Canada and Italy. Inflation in Canada in 1 year was 5%, and in Italy 10%. Which one of the following statements about the Canadian exchange rate (rounded) during that year will be true? A. Inflation has no effect on the exchange rates. B. The Canadian dollar will appreciate by 5%. C. The Canadian dollar will depreciate by 5%. D. The Canadian dollar will depreciate by 15%. CMA 1288 1-18 FINANCIAL STATEMENT PRESENTATION & REQUIRED DISCLOSURES Balance Sheet Presentation 11. A translation adjustment resulting from the translation process is disclosed on the financial statements a. as a separate component of stockholders' equity. b. as a below-the-line item on the income statement. c. as an adjustment to retained earnings. d. as a part of income from operations on the income statement. S, S & S Income Statement Presentation Cash Flow Statement Presentation Required Disclosures ANSWER EXPLANATIONS CMA 0688 1-22 50. If risk is purposely undertaken in the foreign exchange market, the investor in foreign exchange then becomes A. A speculator. C. Involved in hedging. B. An arbitrageur. D. An exporter. CMA 0688 1-23 51. The U.S. dollar has a free-floating exchange rate. If the dollar falls considerably in relation to other currencies over the next 2 years, the A. Capital account in the U.S. balance of payments will be neither in a deficit nor in a surplus because of the floating exchange rates. B. Fall in the dollar's value will not be expected to have any effect on the U.S. trade balance. C. Cheaper dollar will help U.S. importers of foreign goods. CMA 1288 1-15 D. Cheaper dollar will help U.S. exporters of domestically produced goods. CHIANG KAI SHEK COLLEGE Page 7 of 16 GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT RISK MANAGEMENT 1. Register to View Answeris correct. The elements of the financial statements of separate entities within an enterprise must be consolidated if the performance, financial position, and cash flows of the enterprise are to be presented. If those statements are in different currencies, they must be translated into the reporting currency. According to SFAS 52, the functional currency translation approach is appropriate for use in accounting for and reporting the financial results and relationships of foreign subsidiaries in consolidated statements. It involves identifying the functional currency of the entity (the currency of the primary economic environment in which the entity operates), measuring all elements of the financial statements in the functional currency, and using a current exchange rate for translation from the functional currency to the reporting currency. Register to View Answeris incorrect because the primary financial statements are based on historical cost and nominal dollar accounting. They do not reflect changes in general or specific price levels, except for changes in foreign exchange rates. Register to View Answeris incorrect because SFAS 52 ordinarily requires immediate recognition of changes in exchange rates. Register to View Answeris incorrect because SFAS 52 also applies to revenues, expenses, gains, and losses. 2. Register to View Answeris correct. When a foreign currency transaction gives rise to a receivable or a payable, a change in the exchange rate between the measurement currency and the currency in which the transaction is denominated is a foreign currency transaction gain (loss) that should be included as a component of income from continuing operations. Register to View Answeris incorrect because transaction gains (losses) are not so unusual as to warrant extraordinary status. Register to View Answeris incorrect because adjustments to retained earnings are made only for prior-period adjustments, and transaction gains (losses) do not meet the criteria for such treatment. Register to View Answeris incorrect because foreign currency translation gains and losses (not transaction gains and losses) are reported in other comprehensive income, a component of equity. 3 4. Register to View Answeris correct. A foreign currency transaction is one whose terms are denominated in a currency other than the entity's functional currency. When a foreign currency transaction gives rise to a receivable or a payable that is fixed in terms of the amount of foreign currency to be received or paid, a change in the exchange rate between the functional currency and the currency in which the transaction is denominated results in a gain or loss that ordinarily should be included as a component of income from continuing operations in the period in which the exchange rate changes. Register to View Answeris incorrect because the extent of any gain or loss cannot be known at the date of the original transaction. Register to View Answeris incorrect because retroactive recognition is not permitted. Register to View Answeris incorrect because gains and losses are to be recognized in the period of the rate change. 5. Register to View Answeris correct. SFAS 52 requires foreign currency transaction (not translation) gains and losses to be recognized in income in the period in which exchange rates changed. Gains and losses on hedged contracts, however, are deferred and recognized as part of the related transaction. Register to View Answeris incorrect because whether a transaction gain or loss will occur cannot be known when the transaction originates. Only when the exchange rates change can the exchange gain or loss be determined. Register to View Answeris incorrect because hedging gains and losses are handled differently from normal transaction gains and losses. Register to View Answeris incorrect because intercompany transactions are handled through consolidation and translation. 6 . . REQUIRED: The accounting treatment of a foreign currency transaction gain. DISCUSSION: (A) This foreign currency transaction resulted in a payable denominated in a foreign currency. The favorable change in the exchange rate between the functional currency and the currency in which the transaction was denominated should be reported as a gain included as a component of income from continuing operations. Answers (B), (C), and (D) are incorrect because a foreign currency transaction gain should be included as a component of income from continuing operations. REQUIRED: The amount of gain that should be included in the 2000 financial statements. DISCUSSION: (A) The change in the exchange rate between the functional currency and the currency in which a foreign currency transaction is denominated is a gain or loss that ordinarily should be included as a component of income from continuing operations in the period in which the exchange rate changes. Thus, the amount of the gain that should be included in the 2000 financial statements should be the gain realized from the beginning of 2000 to January 20, 2000. Answers (B), (C), and (D) are incorrect because the gain from December 31, 1999 to January 20, 2000 should be included in the 2000 financial statements. The gain from December 1, 1999 to December 31, 1999 should be included in the 1999 financial statements. REQUIRED: The reason no foreign currency transaction gain or loss occurred. DISCUSSION: (B) The terms of a foreign currency transaction are denominated in a currency other than the functional currency. A fluctuation in the exchange rate between the functional currency and the other currency is a gain or loss that ordinarily should be included as a component of income from continuing operations when the rate changes. If Mild Co.s Page 8 of 16 7 . CHIANG KAI SHEK COLLEGE GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT RISK MANAGEMENT functional currency is the U.S. dollar and the transaction was denominated in U.S. dollars, no foreign currency transaction gain or loss occurred. Register to View Answeris incorrect because foreign currency transaction gains and losses are ordinarily treated as operating items. Register to View Answeris incorrect because foreign currency transaction gains and losses not included in the determination of net income (certain intercompany transactions and certain hedges) are reported in other comprehensive income. Register to View Answeris incorrect because translation gains and losses arise from expressing in the reporting currency amounts denominated in the functional currency. Because the U.S. dollar is presumably the reporting and the functional currency of Mild Co., no translation is required. The correct answer is (B). REQUIRED: The classification of a gain or loss due to exchange rate fluctuations. DISCUSSION: SFAS 52 requires that a receivable or payable denominated in a foreign currency be adjusted to its current exchange rate at each balance sheet date. Denominated in a foreign currency means that the contract is settled in that currency. The transaction gain or loss arising from this adjustment should ordinarily be reflected in current income. Because title passed on December 15, the liability fixed in LCUs should have been recorded on that date at the 20-LCU exchange rate. The increase to 21 LCUs per dollar at year-end decreases the dollar value of the liability and results in a foreign currency transaction gain. Such a gain is ordinarily treated as a component of income from continuing operations. Register to View Answeris incorrect because the strengthening of the dollar resulted in a gain. Answers (C) and (D) are incorrect because an extraordinary item is infrequent and unusual in nature. Exchange rates change frequently. The correct answer is (B). REQUIRED: The movements in exchange rates. DISCUSSION: A gain on a receivable denominated in a foreign currency results when the fixed amount of the foreign currency can be exchanged for a greater number of dollars at the date of collection, that is, when the number of foreign currency units exchangeable for a dollar decreases. A loss on a payable denominated in a foreign currency results when the number of dollars needed to purchase the fixed amount of the foreign currency increases, that is, when the number of foreign currency units exchangeable for a dollar decreases. Answers (A), (C), and (D) are incorrect because a gain on a foreign currency receivable and a loss on a foreign currency payable result when the dollar weakens. 10. Register to View Answeris correct. An entity's functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment in which an entity primarily generates and expends cash. CHIANG KAI SHEK COLLEGE 9. 8. Register to View Answeris incorrect because the currency of the parent may or may not be the functional currency of the foreign subsidiary, depending on where the subsidiary and parent conduct operations. Register to View Answeris incorrect because the U.S. dollar may or may not be the functional currency of a foreign subsidiary, depending on where the subsidiary conducts its operations. Register to View Answeris incorrect because a foreign entity's functional currency might not be the currency of the country in which the entity is located or incorporated. 11 . REQUIRED: The foreign subsidiarys functional currency. DISCUSSION: (D) The method used to convert foreign currency into amounts units of the reporting currency is the functional currency translation approach. It is appropriate for use in accounting for and reporting the financial results and relationships of foreign subsidiaries in consolidated statements. This method identifies the functional currency of the entity (the currency of the primary economic environment in which the foreign entity operates), measures all elements of the financial statements in the functional currency, and uses a current exchange rate for translation from the functional currency to the reporting currency. Answers (A), (B), and (C) are incorrect because the currency in which the subsidiary maintains its accounting records, of the country in which the subsidiary is located, or of the country in which the parent is located may not be the currency indicated by the salient economic indicators, such as cash flows, sales prices, sales markets, expenses, financing, and intercompany transactions. 12. Register to View Answeris correct. SFAS 52 states that the functional currency is that of the primary economic environment in which an entity operates. Thus, it is usually the currency in which cash is generated and expended by the entity whose financial statements are being translated. Indications that the subsidiary's currency is the functional currency include the following: Its cash flows are primarily in that foreign currency, they do not affect the parent's cash flows, labor and materials are obtained in the local market of the foreign subsidiary, subsidiary financing is obtained from local foreign sources and from the subsidiary's operations, and few intercompany transactions take place between the foreign subsidiary and the parent. However, sales prices that are responsive to exchange rate fluctuations and international competition suggest that the functional currency is the parent's currency. Register to View Answeris incorrect because it is a factor indicating that the functional currency is the foreign currency. Register to View Answeris incorrect because it is a factor indicating that the functional currency is the foreign currency. Register to View Answeris incorrect because it is a factor indicating that the functional currency is the foreign currency. 13. Register to View Answeris correct. The functional currency is the currency of the primary economic environment in which an entity operates. It is normally the currency of the environment in Page 9 of 16 GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT RISK MANAGEMENT which an entity primarily generates and expends cash. If a U.S. company's foreign affiliate's sales prices are responsive to short-term changes in exchange rates and worldwide competition, its functional currency is likely to be the U.S. dollar. Register to View Answeris incorrect because cash flows that are primarily in a foreign currency indicate that the foreign currency is the functional currency. Register to View Answeris incorrect because, when financing is obtained primarily from foreign sources and operations, the foreign currency is likely to be the functional currency. Register to View Answeris incorrect because, when costs are primarily paid in the foreign country, the foreign currency is likely to be the functional currency. 14. not reflected in the current periods income. Translation adjustments are reported in other comprehensive income. Answers (A), (B) and (C) are incorrect because each is an integral part of the functional currency translation approach. 17 The correct answer is (D). REQUIRED: The number of functional currencies involved in measuring the financial activities of a parent and three distinct subsidiaries operating in different environments. DISCUSSION: The activities of an entity must be measured in terms of the currency of the primary economic environment in which the entity operates, that is, the functional currency. Because the four operations (parent and three subsidiaries) are distinct and separable from each other and are conducted in four different economic environments, each entity will use a different functional currency to measure its operations. Answers (A), (B), and (C) are incorrect because each of the four operations has its own functional currency. The correct answer is (A). REQUIRED: The method used to convert foreign subsidiary financial statements for consolidation purposes. DISCUSSION: According to SFAS 52, the functional currency translation approach is appropriate for use in accounting for and reporting the financial results and relationships of foreign subsidiaries in consolidated statements. It involves identifying the functional currency of the entity (the currency of the primary economic environment in which the entity operates), measuring all elements of the financial statements in the functional currency, and using a current exchange rate for translation from the functional currency to the reporting currency. Answers (B), (C), and (D) are incorrect because the currency in which the subsidiary maintains its accounting records, of the country in which the subsidiary is located, or of the country in which the parent is located may not be the currency indicated by the salient economic indicators, such as cash flows, sales prices, sales markets, expenses, financing, and intercompany transactions. The correct answer is (D). REQUIRED: The item that is not an element of the functional currency translation approach. DISCUSSION: According to SFAS 52, a gain or loss arising from translation from the functional currency into the reporting currency is . REQUIRED: The term that would be remeasured using historical exchange rats. DISCUSSION: (A) SFAS 52 requries the current rate of exchange to be used for remeasuring certain balance sheet items and the historical rate for other balance sheet items. Nonmonetary balance sheet items and related revenue, expense, gain and loss accounts are remeasured at the historical rate. Monetary accounts are remeasured at the current rate. Inventories valued at cost are nonmonetary items and are measured at historical rates. Answers (B), (C), and (D) are incorrect because equity securities reported at fair values, bonds payable, and accrued liabilities are monetary items valued at the current rate. 15. 18. Register to View Answeris correct. The current rate should be used for all items except common nonmonetary balance sheet accounts and their related revenues, expenses, gains, and losses, which are remeasured at historical rates. Thus, most monetary items, such as an investment in bonds, are remeasured at the current exchange rate. Register to View Answeris incorrect because plant assets and marketable equity securities are not monetary assets. They should be remeasured at historical rates. Register to View Answeris incorrect because a patent is remeasured at historical rates. Register to View Answeris incorrect because the revenue from a long-term construction contract is one of the exceptions for which the current rate is not to be used. 19. Register to View Answeris correct. SFAS 52 requires that the affiliate's statements first be remeasured into its functional currency. Then, a current exchange rate is used to translate the foreign entity's financial statements into U.S. dollars. This method applies the current exchange rate to all elements of the financial statements. The gains and losses are accumulated in a separate shareholders' equity account to be recognized in income upon the sale or liquidation of the foreign entity. Register to View Answeris incorrect because SFAS 52 requires translation using a current exchange rate. Noncurrent (historical) rates are used in the remeasurement of certain items. Register to View Answeris incorrect because consideration of whether items are monetary or nonmonetary is a factor in remeasurement, not translation. Thus, nonmonetary balance sheet items and related revenues and expenses are remeasured at historical exchange rates. Register to View Answeris incorrect because, although the temporal method should be used for remeasurement, the question does not state whether the financial statements are presented in a currency other than the functional currency. Page 10 of 16 16. CHIANG KAI SHEK COLLEGE GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT RISK MANAGEMENT 20 . REQUIRED: The proper reporting of a gain arising from remeasurement. DISCUSSION: (D) If the books of record of a foreign entity are maintained in a currency other than the functional currency, SFAS 52 requires that the foreign currency amounts first be remeasured into the functional currency using the temporal method and then translated using the current rate method into the reporting currency. The gain arising from remeasurement should be reported as part of continuing operations. Register to View Answeris incorrect because the gain is not deferred. Register to View Answeris incorrect because a gain arising from translation, not remeasurement, is reported in other comprehensive income. Register to View Answeris incorrect because none of the criteria for treatment as an extraordinary item has been met. 21. The correct answer is (D). REQUIRED: The item that should be remeasured using the historical exchange rate. DISCUSSION: Financial statements are remeasured using the temporal rate method. In general, this method adjusts monetary items at the current rate and nonmonetary items at the historical rate. Prepaid expenses, a nonmonetary item, should be remeasured using the historical rate. Answers (A), (B), and (C) are incorrect because they are monetary items. Thus, they should be remeasured using the current rate of exchange. 25 DISCUSSION: (C) When the currency used to prepare a foreign entitys financial statements is its functional currency. SFAS 52 specifies that the current rate method be used to translate the foreign entitys financial statements into the reporting currency. The translation gains and losses arising from applying this method are reported in other comprehensive income in the consolidated statements and are not reflected in net income. Accumulated other comprehensive income is a component of equity displayed separately from retained earnings and additional paid-in capital in the statement of financial position (SFAS 130). Because a cumulative foreign currency translation loss reduces the balance, it is a debit item. Register to View Answeris incorrect because a discount on bonds is a contra account to bonds payable in the liability section of the balance sheet. Register to View Answeris incorrect because premium on bonds is a contra account to bonds payable in the liability section. Register to View Answeris incorrect because organizational costs are intangible assets. 24. 22. Register to View Answeris correct. SFAS 52 adopts the functional currency translation approach. Translation adjustments resulting from translating the functional currency into U.S. dollars are not reported in the income statement but are accumulated in a separate shareholders' equity account to be recognized in income upon the sale or liquidation of the foreign entity. However, foreign currency transaction gains or losses are ordinarily recognized in the income statement of the period in which the exchange rate changes. Accordingly, the aggregate transaction gain or loss included in earnings shall be disclosed. Register to View Answeris incorrect because allocation of income tax expense is required, including those income taxes related to translation adjustments and those transaction gains and losses recorded in a separate component of equity. Register to View Answeris incorrect because the adjustment for foreign currency translation is a component of equity, not net income. Register to View Answeris incorrect because an enterprise's financial statements are not adjusted for rate changes after their effective date or after the date of foreign currency statements of a foreign entity if they are consolidated, combined, or accounted for under the equity method in the enterprise's financial statements. 23 The correct answer is (B). REQUIRED: The basis for the parents translation gain or loss if all assets and liabilities of the foreign subsidiary are translated at the current exchange rate. DISCUSSION: When the functional currency of a foreign subsidiary is the local (foreign) currency, translation of all assets and liabilities is required at the current rate as of the balance sheet date. Answers (A), (C), and (D) are incorrect because translation of net assets (total assets total liabilities) is required. . REQUIRED: The reporting of a translation loss and a transaction gain on a hedge of a net investment in a foreign entity. DISCUSSION: (A) Translation adjustments are gains and losses from translating financial statements from the functional to the reporting currency. They should also be reported in other comprehensive income. They are not included in the determination of net income. When a foreign currency transaction gives rise to a receivable or a payable, fixed in terms of the amount of foreign currency, a change in the exchange rate between the functional currency and the currency in which the transaction is denominated is a gain or loss that ordinarily should be included as a component of income from continuing operations in the period in which the exchange rate changes. However, a gain or loss on a foreign currency transaction that hedges a net investment in a foreign entity is reported in the same manner as a translation adjustment. Thus, the translation loss and the transaction gain are reported in other comprehensive income. Answers (B), (C), and (D) are incorrect because the translation loss and the transaction gain are reported in other comprehensive income. . REQUIRED: The item debited to other comprehensive income. Page 11 of 16 CHIANG KAI SHEK COLLEGE GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT RISK MANAGEMENT 26. Register to View Answeris correct. SFAS 52 recognized that the currency in a highly inflationary economy is not stable enough to be a functional currency. Instead, the more stable currency of the parent corporation should be used as the functional currency. A highly inflationary economy has a cumulative inflation rate over a 3-year period of at least 100%. Register to View Answeris incorrect because SFAS 52 specifies an inflation rate of at least 100% over a 3year period. Register to View Answeris incorrect because SFAS 52 specifies an inflation rate of at least 100% over a 3-year period. Register to View Answeris incorrect because SFAS 52 specifies an inflation rate of at least 100% over a 3-year period. 27. The correct answer is (D). REQUIRED: The test for a highly inflationary economy applied to a foreign economic environment. DISCUSSION: The financial statements of a foreign entity in a highly inflationary economy should be remeasured into the reporting currency; that is, the reporting currency should be treated as if it were the functional currency. SFAS 52 defines a highly inflationary economy as one that has cumulative inflation of approximately 100% or more over a 3-year period. Answers (A), (B), and (C) are incorrect because the cumulative inflation rate is used to determine highly inflationary economies. The correct answer is (D). REQUIRED: The proper exchange rates used for balance sheet items of a foreign operation in a highly inflationary economy. DISCUSSION: When a foreign entity operates in an environment that is highly inflationary (approximately 100% or more inflation over a 3-year period), SFAS 52 requires that financial statements be remeasured into the reporting currency; that is, the reporting currency is treated as if it were the functional currency. A nonmonetary asset, such as equipment, and its related expense or revenue items are remeasured at applicable historical rates. The results should be the same as if those items had initially been recorded in the currency (the U.S. dollar) into which they are being remeasured. Answers (A), (B) and (C) are incorrect because nonmonetary assts and related expenses are remeasured at historical rates. 30. Register to View Answeris correct. Unrealized foreign currency gains and losses in the other comprehensive income section of the balance sheet can arise from unrealized gains and losses on available-for-sale securities, from certain hedging transactions (cash flow hedges), and from translation of foreign currency financial statements. SFAS 52 requires that foreign currency translation adjustments resulting from translation of an entity's financial statements into the reporting currency be reported on the balance sheet in other comprehensive income. Accumulated currency translation gains or losses remain in that section until the foreign entity is sold or liquidated. At that time, translation gains or losses will be recognized in the income statement. Register to View Answeris incorrect because transaction gains and losses (as opposed to translation gains and losses) are recognized in the income statement as they occur. Register to View Answeris incorrect because remeasurement gains and losses are included in net income. Register to View Answeris incorrect because SFAS 52 states the GAAP for reporting of translation adjustments. 31. Register to View Answeris correct. SFAS 52, Foreign Currency Translation, concludes that foreign currency translation adjustments for a foreign operation that is relatively self-contained and integrated within its environment do not affect cash flows of the reporting enterprise and should be excluded from net income. When an operation is relatively self-contained, the cash generated and expended by the entity is normally in the currency of the foreign country, and that currency is deemed to be the operation's functional currency. Register to View Answeris incorrect because, when an operation is relatively self-contained, the assumption is that translation adjustments do not affect cash flows. Register to View Answeris incorrect because, when an operation is relatively self-contained, the assumption is that translation adjustments do not affect cash flows; and translation adjustments should be included in other comprehensive income, not recognized in income. Register to View Answeris incorrect because translation adjustments should be included in other comprehensive income, not recognized in income. The correct answer is (B). REQUIRED: The item(s) translated at the weightedaverage exchange rate for the current year. DISCUSSION: When an entitys local currency is the functional currency and this currency has not experienced significant inflation, translation into the reporting currency of all elements of the financial statements must be at a current exchange rate. Assets and liabilities are translated at the exchange rate at the balance sheet date. Revenues (e.g., sales), expenses (e.g., wages), gains, and losses should be translated at the rates in effect when they were recognized. However, translation of income statement items at a weighted-average rate for the period is permitted. Page 12 of 16 32. 28. 29. Register to View Answeris correct. SFAS 52 (as amended) requires that adjustments resulting from translation of an entity's foreign-currency denominated financial statements into the reporting currency be reported on the balance sheet in the equity section under accumulated other comprehensive income (OCI). Register to View Answeris incorrect because foreign currency transaction gains and losses are included in earnings. Register to View Answeris incorrect because certain items, for example, gains and losses on a qualifying foreign currency fair value hedge, are included in earnings. Register to View Answeris incorrect because GAAP require translation adjustments to be reported in OCI. CHIANG KAI SHEK COLLEGE GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT RISK MANAGEMENT Answers (A), (C), and (D) are incorrect because wages expense and sales to customers are appropriately translated using the weighted-average exchange rate for the current year. 33. Register to View Answeris incorrect because the Euro is not as heavily used as the U.S. dollar. Register to View Answeris incorrect because the Japanese yen is not as heavily used as the U.S. dollar. Register to View Answeris incorrect because the Swiss franc is not as heavily used as the U.S. dollar. 37. Register to View Answeris correct. The returns on the stock are presumably paid in marks. Hence, the change in the value of the mark relative to the dollar does not affect the German company's return. However, the weakening of the mark reduces the number of dollars it will buy, and the U.S. company's return in dollars is correspondingly reduced. Register to View Answeris incorrect because the return to the U.S. company is adversely affected by the exchange rate movement. Register to View Answeris incorrect because the return to the U.S. company was directly affected by the exchange rate movement, but the return to the German company was not. Register to View Answeris incorrect because the return to the U.S. company was directly affected by the exchange rate movement, but the return to the German company was not. 38. Register to View Answeris correct. Interest rate futures contracts involve risk-free bonds, such as U.S. Treasury bonds. When interest rates decrease over the period of a forward contract, the value of the bonds and the forward contract increase. Register to View Answeris incorrect because the value of the forward contract will increase when interest rates decrease. Register to View Answeris incorrect because the value of the forward contract will increase when interest rates decrease. Register to View Answeris incorrect because any decline in interest rates increases the value of the bonds. 39. Register to View Answeris correct. A speculative forward contract is a contract that does not hedge any exposure to foreign currency fluctuations; it creates the exposure. Both the receivable from the broker and the liability to the broker are recorded at the forward exchange rate existing at the date of the contract. The receivable or liability denominated in the foreign currency is adjusted to reflect the forward rate at each ensuing balance sheet date and at the date of settlement, with a corresponding recognition of exchange gain or loss. Register to View Answeris incorrect because for foreign exchange hedges the receivable or payable denominated in dollars is recorded at the forward exchange rate, and the payable or receivable denominated in foreign exchange units is recorded at the spot rate. The difference is recorded as a discount or premium. Register to View Answeris incorrect because for foreign exchange hedges the receivable or payable denominated in dollars is recorded at the forward exchange rate, and the payable or receivable denominated in foreign exchange units is recorded at the spot rate. The difference is recorded as a discount or premium. Register to View Answeris incorrect because for foreign exchange hedges the receivable or payable denominated in dollars is recorded at the forward exchange rate, and the payable or receivable denominated in foreign Page 13 of 16 The correct answer is (B). REQUIRED: The account that is not remeasured at the historical rate. DISCUSSION: When a foreign subsidiarys functional currency is the U.S. dollar, all accounts of that subsidiary reported in a foreign currency must be remeasured as if they had been recorded in the U.S. dollar. Nonmonetary balance sheet items and related revenue, expense, gain, and loss accounts are remeasured at the historical rate. Monetary accounts are remeasured at the current rate. Inventories carried at market value are classified as monetary assets and should therefore be remeasured at the current rate. Answers (A), (C), and (D) are incorrect because they are listed by SFAS 52 as accounts to be remeasured using historical exchange rates. 34. Register to View Answeris correct. If the forward rate in terms of foreign currency units per dollar is greater than the spot rate, the dollar is selling at a premium and the foreign currency at a discount. Speculators expect the dollar to appreciate. Register to View Answeris incorrect because, if the forward exchange rate in terms of foreign currency units per dollar is lower than the spot rate, the U.S. dollar is selling at a discount. Register to View Answeris incorrect because speculators expect the dollar to appreciate if it is selling at a premium. Register to View Answeris incorrect because, when the foreign nominal interest rate is lower than the domestic nominal rate, the forward foreign currency sells at a premium. 35. Register to View Answeris correct. An exchange rate may be stated in dollars per foreign currency unit (in direct or American terms) or in foreign currency units per dollar (in indirect or European terms). In the U.S., indirect quotations are used for all currencies except the British pound. Moreover, foreign currency exchanges worldwide also follow this convention. Register to View Answeris incorrect because exchange rates are usually stated in indirect or European terms rather than in indirect or American terms. Register to View Answeris incorrect because exchange rates are usually stated in indirect or European terms rather than in indirect or American terms. Register to View Answeris incorrect because exchange rates are usually stated in indirect or European terms rather than in indirect or American terms. 36. Register to View Answeris correct. The U.S. dollar is the most widely used currency in international markets today. It is considered much more stable than any of the third-world currencies. Thus, many third-world countries rely on the U.S. dollar for foreign trade. CHIANG KAI SHEK COLLEGE GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT RISK MANAGEMENT exchange units is recorded at the spot rate. The difference is recorded as a discount or premium. 40. Register to View Answeris correct. A forward contract is an executory contract in which the parties involved agree to the terms of a purchase and a sale, but performance is deferred. Accordingly, a forward contract involves a commitment today to purchase a product on a specific future date at a price determined today. Register to View Answeris incorrect because the price of a future contract is determined on the day of commitment, not some time in the future. Register to View Answeris incorrect because performance is deferred in a future contract, and the price of the product is not necessarily its present price. The price can be any price determined on the day of commitment. Register to View Answeris incorrect because a forward contract is a firm commitment to purchase a product. It is not based on a contingency. Also, a forward contract does not involve an exercise price (exercise price is in an option contract). 41. Register to View Answeris correct. The difference between the contract rate and the spot rate at the date of a forward exchange contract's inception is a discount or premium on the forward contract. A discount or premium should be accounted for separately from the gain or loss on the contract, and should be included in net income over the life of the contract through amortization of the discount or premium. An exception to this amortization requirement is a hedge of an identifiable foreign currency commitment. In this case, the discount or premium related to the commitment period may be included in the related foreign currency transaction when it is recorded. Register to View Answeris incorrect because a premium or discount is calculated as the difference between the contracted forward rate and the spot rate at the date of inception of the contract. Register to View Answeris incorrect because a premium or discount is calculated as the difference between the contracted forward rate and the spot rate at the date of inception of the contract. Register to View Answeris incorrect because a premium or discount is calculated as the difference between the contracted forward rate and the spot rate at the date of inception of the contract. 42. Register to View Answeris correct. A speculative forward contract is a contract that does not hedge any exposure to foreign currency fluctuations; it creates the exposure. Both the receivable from the broker and the liability to the broker are recorded at the forward exchange rate existing at the date of the contract. The receivable or liability denominated in the foreign currency is adjusted to reflect the forward rate at each ensuing balance sheet date and at the date of settlement, with a corresponding recognition of exchange gain or loss. Register to View Answeris incorrect because for foreign exchange hedges the receivable or payable denominated in dollars is recorded at the forward exchange rate, and the payable or CHIANG KAI SHEK COLLEGE receivable denominated in foreign exchange units is recorded at the spot rate. The difference is recorded as a discount or premium. Register to View Answeris incorrect because for foreign exchange hedges the receivable or payable denominated in dollars is recorded at the forward exchange rate, and the payable or receivable denominated in foreign exchange units is recorded at the spot rate. The difference is recorded as a discount or premium. Register to View Answeris incorrect because for foreign exchange hedges the receivable or payable denominated in dollars is recorded at the forward exchange rate, and the payable or receivable denominated in foreign exchange units is recorded at the spot rate. The difference is recorded as a discount or premium. 43. Register to View Answeris correct. The returns on the stock are presumably paid in marks. Hence, the change in the value of the mark relative to the dollar does not affect the German company's return. However, the weakening of the mark reduces the number of dollars it will buy, and the U.S. company's return in dollars is correspondingly reduced. Register to View Answeris incorrect because the return to the U.S. company is adversely affected by the exchange rate movement. Register to View Answeris incorrect because the return to the U.S. company was directly affected by the exchange rate movement, but the return to the German company was not. Register to View Answeris incorrect because the return to the U.S. company was directly affected by the exchange rate movement, but the return to the German company was not. 44. Register to View Answeris correct. The American importer should buy pounds now. If the dollar depreciates against the pound in the next 90 days, the gain on the forward exchange contract would offset the loss from having to pay more dollars to satisfy the liability. Register to View Answeris incorrect because selling pounds would compound the risk of loss for someone who has incurred a liability. However, it would be an appropriate hedge of a receivable denominated in pounds. Register to View Answeris incorrect because the importer needs pounds, not dollars. Register to View Answeris incorrect because, although buying pounds might be equivalent to selling dollars for pounds, this is not the best answer. This choice does not state what is received for the dollars. 45. Register to View Answeris correct. Assuming the original exchange rate is $1 to 2,000 lira and that U.S. inflation is 5%, the cost in lira to purchase what once cost $1 will now be 2,100 lira (2,000 x 1.05). However, if the lira also depreciates by 10%, the exchange rate will be $1 to 2,200 lira. At this rate, 2,310 lira (2,200 x 1.05) will be required to purchase $1.05. Lira costs will thus increase by just over 15% (310 2,000). Register to View Answeris incorrect because the combined effect of U.S. inflation and the decline in value of the lira would cause the lira costs for U.S. imports to increase. Register to View Answeris incorrect because the combined effect of U.S. inflation and the decline in value of the lira would cause Page 14 of 16 GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT RISK MANAGEMENT the lira costs for U.S. imports to increase. Register to View Answeris incorrect because 5% is the difference between the currency depreciation and the inflation rate. 46. Register to View Answeris correct. An overvalued exchange rate is a tax on exports because they will be overvalued in terms of the foreign currency. For example, if the true value of $1 is 5 marks but the exchange rate is $1 to 6 marks, the cost of goods priced in dollars will include a 20% tax for holders of marks. It is also a subsidy to imports because the overly high exchange rate causes the price of foreign goods and services to be undervalued. In the same example, $1 will buy 6 marks' worth of imports instead of 5, a 20% subsidy. Register to View Answeris incorrect because devaluation taxes imports and subsidizes exports. Register to View Answeris incorrect because capital flows and trade flows will be affected. Register to View Answeris incorrect because capital flows and trade flows will be affected. 47. Register to View Answeris correct. The dollar has declined in value relative to the mark. If an American had previously wished to purchase a German product that was priced at 12 marks, the dollar price would have been $2. After the decline in value, the dollar cost of the item has increased to $3. Therefore, imports from Germany should decrease and exports increase. Register to View Answeris incorrect because the mark has appreciated (increased in value) relative to the dollar. Register to View Answeris incorrect because the mark has appreciated (increased in value) relative to the dollar. Register to View Answeris incorrect because dollars will buy fewer German products. 48. Register to View Answeris correct. The increase in demand for U.S. products will increase the demand for the dollars necessary to pay for those products. Register to View Answeris incorrect because the demand for dollars, not the supply, will be affected by the decision to purchase additional U.S. products. Register to View Answeris incorrect because the demand for dollars, not the supply, will be affected by the decision to purchase additional U.S. products. Register to View Answeris incorrect because the dollar should appreciate relative to the yen owing to the increased demand for dollars. 49. Register to View Answeris correct. Although currencies can be supported by various means for short periods, the primary determinant of exchange rates is the supply of, and demand for, the various currencies. Under current international agreements, exchange rates are allowed to "float." During periods of extreme fluctuations, however, governments and control banks may intervene to maintain stability in the market. Register to View Answeris incorrect because an industrial country's government has only temporary influence, if any, on the setting of exchange rates. Register to View Answeris incorrect because the International Monetary Fund has only temporary influence, if any, on the setting of exchange CHIANG KAI SHEK COLLEGE rates. Register to View Answeris incorrect because exporters and importers of manufactured goods have only temporary influence, if any, on the setting of exchange rates. 50. Register to View Answeris correct. An individual who purposely accepts foreign exchange risk is a speculator. Speculators buy and sell foreign exchange in anticipation of favorable changes in rates. Register to View Answeris incorrect because an arbitrageur is someone who simultaneously buys foreign exchange in one market and sells in another market at a slightly higher price. Thus, the arbitrageur's risk is slight. Register to View Answeris incorrect because hedging avoids the risk of foreign exchange transactions for those who do not seek to gain from fluctuations in exchange rates. Hedging is the sale or purchase of a foreign currency forward exchange contract to offset a possible exchange rate loss. When a foreign currency forward exchange contract is intended and is effective as an economic hedge against an exposed net asset or net liability position (e.g., an outstanding receivable or liability denominated in a foreign currency), any exchange gain or loss on the forward contract will offset any exchange gain or loss on the exposed net asset or net liability position. Thus, no exchange gain or loss will result. Register to View Answeris incorrect because exporters are likely to engage in hedging to avoid exchange risk. 51. Register to View Answeris correct. The decline in the value of the dollar relative to other currencies will lower the price of U.S. goods to foreign consumers. Thus, exporters of domestically produced goods will benefit. The low value of the dollar will decrease imports by making foreign goods more expensive. Register to View Answeris incorrect because the capital account will benefit from the cheaper dollar because foreigners can buy more dollars with fewer yen, marks, etc. Moreover, foreign capital inflow will increase because of the federal government's budget deficits. Register to View Answeris incorrect because the fall in the dollar will have a positive effect on the nation's trade deficit since exports will increase and imports will decrease. Register to View Answeris incorrect because the fall in the dollar will have a positive effect on the nation's trade deficit since exports will increase and imports will decrease. 52. Register to View Answeris correct. Because Italy has experienced the greater inflation, its currency should depreciate in relation to Canada's. For example, if Canada trades 100 units of a product to Italy for a pre-inflation price of $100 (the domestic price in Canada), and Italy pays with 10,000 units of an Italian product that sells domestically for 10,000 pre-inflation lira, the exchange rate without regard to inflation is 100 lira per $1 (10,000 lira/$100). Allowing for the inflation, the 100 units of the Canadian product would sell for $105. The 10,000 units of the Italian product would sell for 11,000 lira. Thus, the new exchange rate will be 104.76 lira per $1 (11,000 lira/$105), and the price of the Canadian dollar will increase by 4.76% (rounded to 5%). Page 15 of 16 GLEIMS CMA/CFM TEST PREP 4.0 PART 2CFM CORPORATE FINANCIAL MANAGEMENT RISK MANAGEMENT Register to View Answeris incorrect because inflation affects exchange rates by diminishing a currency's purchasing power. Register to View Answeris incorrect because the Canadian currency will appreciate relative to Italy's since Canadian inflation was lower. Register to View Answeris incorrect because the Canadian currency will appreciate relative to Italy's since Canadian inflation was lower. CHIANG KAI SHEK COLLEGE Page 16 of 16

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Abraham Baldwin Agricultural College - ACC - 452
Basic Concepts *. The process of analyzing, classifying, summarizing and communicating all transactions involving the receipt and disposition of government funds and property and interpreting the results thereof is a. Government accounting. c. Government
Abraham Baldwin Agricultural College - ACC - 452
NOT-FOR-PROFIT ORGANIZATIONS Objectives of Nonbusiness Organizations 1 . Which one of the following is ordinarily not considered one of the major distinguishing characteristics of nonbusiness organizations? a. Significant amounts of resources are provided
Abraham Baldwin Agricultural College - ACC - 452
GAAP ACCOUNTING FOR PARTNERSHIPS Formation 1 . The Revised Uniform Partnership Act defines a partnership as a. Any association of two or more persons or entities. b. An association of two or more persons to carry on as co-owners a business for profit. c.
Abraham Baldwin Agricultural College - ACC - 452
Chapter 1: Environment and Theoretical Structure of Financial AccountingREVENUE RECOGNITION FOR FRANCHISES 22. Franchise fees are properly recognized as revenue a. when received in cash. b. when a contractual agreement has been signed. c. after the franc
Abraham Baldwin Agricultural College - ACC - 452
Past CPA Board on MASPART I. Basic Consideration in MAS and Consulting Practice1. Which of the following statement is True? a. Adequate training and experience in both the analytical approach and process in the particular undertaking are requisites for
Abraham Baldwin Agricultural College - ACC - 452
2nd Flr, GF Partners Bldg, 139 H.V. dela Costa, Salcedo Village, Makati City 3rd Flr. EPCIB Bldg. 2070 Claro M. Recto, ManilaPractical Accounting 2Prof. Jennifer TolentinoQUIZZER IN COST ACCOUNTING Job Order Costing The work in process account of the M
Abraham Baldwin Agricultural College - ACC - 452
2nd Flr, GF Partners Bldg, 139 H.V. dela Costa, Salcedo Village, Makati City 3rd Flr. EPCIB Bldg. 2070 Claro M. Recto, ManilaPractical Accounting 2 Installment SalesProf. Cecilla MercadoDiamante Motors sells locally manufactured jeeps on installments.
Abraham Baldwin Agricultural College - ACC - 452
Abraham Baldwin Agricultural College - ACC - 452
CPA REVIEW SCHOOL OF THE PHILIPPINES Manila PRACTICAL ACCOUNTING PROBLEMS 11 First Preboard Examination Sunday, February 15, 2009 3:00 p.m. to 5:00 p.m.MULTIPLE CHOICE - MARK FULLY with Pencil No. 2 the letter of your choice on the answer sheet provided.
Abraham Baldwin Agricultural College - ACC - 452
OBLIGATIONS Prepared by: Raymond Andes Sources: The New Civil Code of the Philippines; commentaries by Paras and Tolentino; reviewer prepared by Soriano; Bar-Ops reviewer prepared by students of UP Law; and some personal inferences Definition according to
University of Toronto - STA - 414
STA 414/2104 Mar 25, 2010k -means clusteringkm15 = kmeans(x[g=0,],5) km25 = kmeans(x[g=1,],5) for(i in 1:6831)cfw_ md = c(mydist(xnew[i,],km15$center[1,]),mydist(xnew[i,],km15$center[2, mydist(xnew[i,],km15$center[3,]),mydist(xnew[i,],km15$center[4,]),
University of Toronto - STA - 347
University of Toronto - STA - 347
University of Toronto - STA - 347
University of Toronto - STA - 347
University of Toronto - STA - 347
University of Toronto - STA - 347
University of Toronto - STA - 347
University of Toronto - STA - 347
\r,al ,t"o3 /4 apfu r er tA A ,fri;A-/74,;t),oft: ( ;it 7 (U@,t' ( t;);tn'M filpro)za i,",7(u (o,trkf)l = X tt't + o (lzt= saf r ta(r1 f ; (a)/< o-lAr^f"k)+o l )= ) = ; P ( ( ( tt,tttr . J)=^n t N uk) q) , = P (^ lP,t*ol)=) l ( U (t'n,t'tA*hl fr(
University of Toronto - STA - 347
fu a tat 7^.@ ( r,/o)tf i =o ) ) e ' 3 , k l.fd LXr',a1 &re X n=,ry ) ? * GQ2.M^aGhtult' ff /l/1.1'?lP/tlI4fJl-^1Ebl Z 4?/ry))art7 v , Z t t0tuffi/t,,"J^;M'\hi(fcfw_,txr,z^t ;ttl :^,e,(+)A; ) 33.Xtt tu@>lt'- a 3 f u z /7h4Pr
University of Toronto - STA - 347
University of Toronto - STA - 347
University of Toronto - STA - 347
University of Toronto - STA - 347
University of Toronto - STA - 347
University of Toronto - STA - 347
Trinity College, Hartford - CRYOPTOGRA - 3232
Trinity College, Hartford - CRYOPTOGRA - 3232
Trinity College, Hartford - CRYOPTOGRA - 3232
Trinity College, Hartford - CRYOPTOGRA - 3232
University of the Philippines Diliman - CS - NatSci3
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University of Toronto - ECO - 202
Macroeconomics Theory and PolicyMacroeconomics Theory and Policy ECO202Y1YMasoud Anjomshoa1What is Macroeconomics?.Macroeconomics is the study of the behavior of the aggregate economy, i.e. a large collection of economic agents, like aggregate consu
University of Toronto - ECO - 202
Macroeconomics Theory and PolicyClassical vs. Keynesian Views:Classical View: - Quantity - Price- Supply sideP.SS-D DY (GDP)Masoud Anjomshoa 1Classical vs. Keynesian Views:Keynesian View: - Quantity - PriceP.- Supply -SKeynesian view is
University of Toronto - ECO - 202
Macroeconomics Theory and PolicyFinancial Market: LM CurveMasoud Anjomshoa1Economy circular flowIncomeFactor MarketFactor PaymentsPrivate Saving HouseholdsFinancial MarketBorrowingFirmsCapital FlowTaxesBudget DeficitGovernmentGovernment Sp
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Macroeconomics Theory and PolicySupply of MoneyMasoud Anjomshoa1Supply of Money:Reserves (R ): The portion of deposits that banks have not lent. A bank liabilities include deposits. A bank assets include reserves and outstanding loans. 100-percent-re
University of Toronto - ECO - 202
Macroeconomics Theory and PolicyOpen Economy in Short RunMasoud Anjomshoa1Goods Market in Open Economies:.We assume that we have two goods, domestic made good, Y, with price P, and foreign made good, Y*, with price P*. Consumers should decide how mu
University of Toronto - ECO - 202
Macroeconomics Theory and Policy(Credible) Pegged (Fixed) Exchange Regime:In pegged system, the Central Bank sets the exchange rate: E = In order to keep the system credible, the Central Bank must defend the rate , by buying/selling foreign exchange. If
University of Toronto - ECO - 202
Macroeconomics Theory and PolicyBalance of Payments Accounting:Balance of Payments Accounts are parts of System of National Accounts (SNA), which record a countrys international transactions. Current Account (CA): Keeps track of flow Capital and Financi
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Macroeconomics Theory and PolicyModified Phillips Curve:Phillips Curve : t = e u t + ( + z) t e Medium Run : t = t Y = Y u = u n u n + ( + z) = 0 un =( + z ) Expectation Augmented t e = ( u t u n ) t Phillips Curve :If unemployment rate goes below
University of Toronto - ECO - 202
Macroeconomics Theory and PolicyLong Run:Y YY.Short/Medium RunYLong RunYQuartersQuartersQuarters- In the long run, - Money, price level, and nominal variables are ignored. The focus will be only on the real side of the economy. - To check the
University of Toronto - ECO - 202
Macroeconomics Theory and PolicyExpectations, Real and Nominal Interest Rates: .Nominal Interest Rate, i: Rate of return on assets, measured in terms of current dollar. Real Interest Rate, r: Rate of return on assets, measured in terms of a basket of go
University of Toronto - ECO - 202
Macroeconomics Theory and PolicyConsumption Theory Chapter 20Masoud Anjomshoa 1Consumption:Consumption is a very crucial part of demand, because:1- the only objective of an economy is producing the maximum possible consumption, because peoples welfar
University of Toronto - STA - 414
STA 414/2104 S: February 2 2010AdministrationHW due February 11 by 1 pm Thursday, February 4: TA Li Li has ofce hours 1-2 (in class), 2-3 in SS 6027A Chapter 3: 3.1, 3.2 (except 3.2.4), 3.3 (except 3.3.3), 3.4 (except 3.4.4), 3.5.1 Chapter 4: 4.1, 4.2,
University of Toronto - STA - 414
STA 414/2104 S: February 9 2010AdministrationHW due February 11 by 1 pm No class on Thursday, please bring HW to SS 2105 Chapter 3: 3.1, 3.2 (except 3.2.4), 3.3 (except 3.3.3), 3.4 (except 3.4.4), 3.5.1 Chapter 4: 4.1, 4.2, 4.3 (except 4.3.1, 4.3.2), 4.
University of Toronto - STA - 414
STA 414/2104 S: February 23 2010AdministrationHW 2 posted on web page, due March 4 by 1 pm Midterm on March 16; practice questions coming Lecture/questions on Thursday this week Regression: variable selection, regression splines, smoothing splines, wave
University of Toronto - STA - 414
# some fake regression data x = rnorm(20) y = rnorm(20) plot(x,y) y.0 = lm(y ~ 1) abline(h=y.0$coef[1]) d = seq(-2,2,length=200) # polynomial fits for(degree in 1:9)cfw_ fm = lm(y ~ poly(x,degree) assign(paste("y",degree,sep="."),fm) lines(d,predict(fm,da
University of Toronto - STA - 414
STA 414S/2104S: Homework #1Due Feb.11, 2010 at 1 pmLate homework is penalized at 20% deduction per day. You are welcome to discuss your work on this homework with your classmates. You are required to write up the work on your own, using your own words,
University of Toronto - STA - 414
STA 414S/2104S: Homework #2Due Mar. 4, 2010 at 1 pmLate homework is penalized at 20% deduction per day. You are welcome to discuss your work on this homework with your classmates. You are required to write up the work on your own, using your own words,
University of Toronto - STA - 414
Sta 414/2104 S http:/www.utstat.utoronto.ca/reid/414S10.htmlSTA414S/2104S:StatisticalMethodsforDataMiningandMachineLearning JanuaryApril,2010,Tuesday122,Thursday121,SS2105 CourseInformation Thiscoursewillconsidertopicsinstatisticsthathaveplayedaroleint
University of Toronto - STA - 414
STA 414/2104 Jan 12, 2010AdministrationPlease check web page regularly for updateshttp:/www.utstat.utoronto.ca/reid/414S10.htmlBlackboard is used only for email and grades You should by now have have R on your PC, or be planning to go your own route r
University of Toronto - STA - 414
STA 414/2104 Jan 19, 2010AdministrationHomework 1 available Thursday Discussion of project requirements on Thursday NSERC summer undergraduate awards Fields-MITACS undergraduate summer researchhttp:/www.fields.utoronto.ca/programs/scientific/10-11/summ
University of Toronto - STA - 414
STA 414/2104 Jan 26, 2010AdministrationHomework 1 on web page, due Feb 11 NSERC summer undergraduate award applications due Feb 5 Some helpful books1 / 35STA 414/2104 Jan 26, 2010. administration2 / 35STA 414/2104 Jan 26, 2010. administrationcoll
University of Toronto - STA - 414
STA 414/2104 Mar 2, 2010NotesNo Ofce Hour today, Tuesday Mar 2 Practise test questions posted HW 2 due date Tuesday Mar 9 HW 2 questions and HW 1 answers Thursday, Mar 4 Statistical Society of Canada case studieshttp:/www.ssc.ca/documents/case_studies/
University of Toronto - STA - 414
STA 414/2104 Mar 9, 2010NotesSample test questions posted Review and/or questions on Thursday this week Test will have 3 questions: one from Sample test, one specic to 414/2104 Extra Ofce Hour Monday, March 15, 3-4 Watch web site for late breaking annou
University of Toronto - STA - 414
STA 414/2104 Mar 11, 2010NotesTake-home Midterm: March 16 March 25 One question from Kernels and Ensembles by M. Zhu Classication and regression trees 9.2 Ensemble methods and random forests Zhu + 15.1-3 k -means and k -nearest neighbour methods 13.1-3
University of Toronto - STA - 414
STA 414/2104 Mar 16, 2010NotesNo class on Thursday, Mar 18 Takehome MT due Mar 25 Paper Kernels and Ensembles by M. Zhu, is posted under March 9 Quick R: http:/www.statmethods.net/index.html CRAN Task Views: http:/cran.r-project.org/ web/views/MachineLe
University of Toronto - STA - 414
STA 414/2104 Mar 23, 2010NotesClass on Thursday, Mar 25 Takehome MT due Mar 25 Trees and forests; Nearest neighbours and prototypes (Ch. 13) Unsupervised Learning: Cluster analysis and Self-Organizing Maps (Ch. 14) Netix Prize: some details on the model
University of Toronto - STA - 414
STA 414/2104 Mar 30, 2010Notesno class Thursday, April 2 project due Thursday, April 16 before 2 pm see http:/www.utstat.utoronto.ca/reid/ sta414/414S10-html.doc for outline (Jan 5,7)Take-home MT graded by Tuesday, April 6; pickup in SS 60031 / 25STA
University of Toronto - STA - 414
STA 414S/2104S: TakeHome Midterm Test. Due March 25, 2010 before 2 pm. Please work alone. 1. (Adapted from Exercise 2.7, HTF). Suppose we have a sample (y1 , x1 ), . . . , (yN , xN ), and we assume the model yi = f (xi ) + i , (1) where f () is an unkown
University of Toronto - STA - 347
University of Phoenix - XACC/280 - AACL
Axia College MaterialAppendix C Journalizing, Posting, and Preparing a Trial BalanceJournalizing the TransactionsUse this template to journalize the transactions for Jane Kent, Inc. The first two lines are completed for you. You might not require all t