Which of the Following Is an Example of Economic Exposure

question 6

Multiple Choice

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

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

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Definitions:

Global Communication Strategy

A plan for managing and deploying communications across international borders, taking cultural and linguistic differences into account.

Languages

Systems of spoken, written, or gestural symbols and signs used by humans to communicate thoughts, ideas, and emotions.

Dialects

are variations of a language that are specific to a certain region or social group, including differences in vocabulary, grammar, and pronunciation.

Distribution Channels

The pathways through which a product or service is delivered from the producer to the consumer.