A U.S. company buys merchandise from a foreign company denominated in U.S. dollars. Which of the following statements is true?
A. No foreign exchange gain or loss will result.
B. If the foreign currency appreciates, a foreign exchange gain will result.
C. If the foreign currency depreciates, a foreign exchange gain will result.
D. Any gain or loss will be included in comprehensive income.
E. If the foreign currency appreciates, a foreign exchange loss will result.
Answer: A
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