yospaghetti

topher Wrote:
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> A is my answer.
>
> The problem with calgaryeng's explanation is if
> the US dollar is depreciating, your exchange rates
> are backwards. The current rate should be $0.8/1LC
> and the average rate should be $0.85/1LC.

No. The ones I posted earlier should be correct. If the USD is depreciating, it would be something like:

Start of year $0.70
End of year $0.85 (i.e. one unit of foreign currency buys more USD... USD depreciating = foreign currency appreciating)

Therefore average is less than current (i.e. $0.80 is consistent with this breakdown)