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What would be the currency gain or loss for each party

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Question - A US company that has purchased goods from a supplier which is based in the Colombia. The US Company has been invoiced in COP and payment is to be made 30 days after the purchase. During this 30-day period, the dollar strengthened (= appreciated) against the Colombian peso.

Assuming neither the Colombian company nor the US company hedge against currency risk, what would be the currency gain or loss for each party as a result of this transaction?

A) Colombian company: No gain or loss

US company: Loss

B) Colombian company: Gain

US company: No gain or loss

C) Colombian company: Loss

US company: No gain or loss

D) Colombian company: No gain or loss

US company: Gain

Reference no: EM133161089

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