CMA Study Group

Help understanding question CMA PART 2

  • 1.  Help understanding question CMA PART 2

    Posted 12 days ago

    Question: 38If the annual U.S. inflation rate is expected to be 5% while the euro is expected to depreciate against the U.S. dollar by 10%, an Italian firm importing from its U.S. parent can expect its euro costs for these imports to
    Answer (A) is correct.
    Inflation in the U.S. means that $1.05 now has the purchasing power formerly enjoyed by $1.00. The 10% depreciation of the euro means that its purchasing power in dollars has declined to 90%. Dividing the U.S. inflation factor of 1.05 by the new euro value of .90 and subtracting 1 results in a net loss of euro purchasing power against the dollar of 16.67%.

    Tayba Al-Mehdar
    Saudi Arabia

  • 2.  RE: Help understanding question CMA PART 2

    Posted 11 days ago
    hello Friends,

    I am also intrested in Group Study.  Can we creat any whatsapp group for the study?

    Accountant & Taxation Advisor
    United Arab Emirates