Unaffected by the exchange rate fluctuations

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Suppose that a Japanese firm imports iron for its operations from the US and sells its finished products to Spain. If the yen depreciates against the US dollar and appreciates against the euro, which of the following will occur, all else being equal?

  • The Japanese firm's value will increase because they will pay less yen for their imports.
  • The Japanese firm's value will increase because they will receive more yen from their exports.
  • The Japanese firm's value will be unaffected by the exchange rate fluctuations.
  • None of the above.

Reference no: EM132245186

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