senlinlang

I disagree. The question is:

which of the following effects on return on equity (ROE) relative to **** what the ratio would have been without the effects of translation? *****

If the USD is depreciating, the average rate will be lower than the current rate. Making up some numbers:

Avg = $0.80
Current = $0.85

NI = 5 (foreign curr)
SE = 100 (foreign curr)
ROE (foreign curr) = 5%

Tranlated:
NI = $4
SE = $85
ROE (USD) = 4.7% ---> B