​Which of the Following Is an Example of Economic Exposure

question 17

Multiple Choice

​Which of the following is an example of economic exposure but not an example of transaction exposure?

• A) ​An increase in the dollar's value hurts a U.S. firm's domestic sales because foreign competitors are able to increase their sales to U.S. customers.
• B) ​An increase in the pound's value increases a U.S. firm's cost of British pound payables.
• C) ​A decrease in the peso's value decreases a U.S. firm's dollar value of peso receivables.
• D) ​A decrease in the Swiss franc's value decreases the dollar value of interest payments on a Swiss deposit sent to a U.S. firm by a Swiss bank.

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Definitions:

Commercialization

The process of introducing a new product into the market, making it available to consumers largely through advertising and sales strategies.

Leisure

A period of time that can be spent relaxing, engaging in recreation, or otherwise indulging in freely chosen activities.

Recreational Activities

Activities engaged in for enjoyment and relaxation, typically during one's leisure time.

Necessities

Basic needs or essential things that are required for living and maintaining good health, such as food, water, shelter, and clothing.