CFA Practice Question

There are 334 practice questions for this study session.

CFA Practice Question

Which statement is true about the functional currency?
A. The functional currency is the currency of the primary economic environment in which the subsidiary generates and expends cash.
B. The functional currency is always the currency in use by the parent company.
C. The functional currency is $US for US-based companies.
Explanation: This is the definition of functional currency. The functional currency does not have to be the $US.

User Contributed Comments 2

User Comment
yxten1 but why is C incorrect
truss88 a us-based company could do most of its business in a foreign country, so their functional currency could be foreign.
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