4 part question:

A. As a generalized rule, only _______ foreign exchange losses are deductible for tax purposes.

B. A U.S. firm sells merchandise today to a British company for 150,000. The current exchange rate is $1.55/, the account is payable in three months, and the firm chooses to avoid any hedging techniques designed to reduce or eliminate the risk of changes in the exchange rate. If the exchange rate changes to $1.52/ the U.S. firm will realize a ________ of ________.

C. Transaction exposure is the potential for an increase or decrease in the parent company's ______ and reported ______ caused by a change in exchange rates since the last transaction.

D. Historical exchange rates may be used for ________, while current exchange rates may be used for ________.