Chartered Financial Analyst Level 2
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A subsidiary of a European based parent company operates in a foreign country experiencing hyperinflation. The general price level and exchange rates for the country were reported as:
| | General Price Level | Euro (€) per Foreign Currency |
|---------------------|---------------------|-------------------------------|
| Beginning of the year | 150 | 0.360 |
| Average for the year | 250 | 0.210 |
| End of the year | 375 | 0.160 |
If the subsidiary reported a capital stock of 100,000 (in foreign currency units) at the beginning of the year, the reported value at the end of the year is closest to:
A subsidiary of a European based parent company operates in a foreign country experiencing hyperinflation. The general price level and exchange rates for the country were reported as:
| | General Price Level | Euro (€) per Foreign Currency |
|---------------------|---------------------|-------------------------------|
| Beginning of the year | 150 | 0.360 |
| Average for the year | 250 | 0.210 |
| End of the year | 375 | 0.160 |
If the subsidiary reported a capital stock of 100,000 (in foreign currency units) at the beginning of the year, the reported value at the end of the year is closest to:
Exam-Like
A
€16,000.
B
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