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Determine which of the two statements is correct

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Question 1: John Smith Inc. is an U.S.-based investment fund that owns substantial EUR-denominated investments in Germany; J.C. Inc. is an U.S.-based import business specializing in Italian luxury food items; Assume that J.C. Inc. pays his Italian suppliers in EUR. If X0USD/EUR = 1.05 to X1USD/EUR = 1.13. Which of the following two statements is correct?

S1: John Smith Inc. benefits from this FX rate change.

S2: J.C. Inc. benefits from this FX rate change.

Which is correct?

  1. S2 is correct but S1 is false
  2. Both statements are correct
  3. Both statements are false
  4. S1 is correct and S2 is false

Reference no: EM132482895

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