Change in the Value of Noncontractual Cash Flows Due to Unexpected

question 22

Multiple Choice

Change in the value of noncontractual cash flows due to unexpected changes in currency values is called ______ to currency risk.

• A) economic exposure
• B) operating exposure
• C) transaction exposure
• D) translation exposure
• E) None of the above

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Definitions:

Autarky

A national economic policy aimed at self-sufficiency, avoiding the import of foreign goods.

Netherlands

A country located in Northwestern Europe known for its flat landscape, extensive canal systems, tulip fields, windmills, and cycling routes.

Belgium

A country in Western Europe known for its medieval towns, Renaissance architecture, and as the headquarters of the European Union and NATO.

Opportunity Cost

The value of the next best alternative foregone as the result of making a decision.