Translation Exposure Occurs Because of Changes in Foreign Exchange Rates

question 109

True/False

Translation exposure occurs because of changes in foreign exchange rates.

---

Definitions:

Subsidiary

A company controlled by another company, often referred to as the parent company, through ownership of a majority of its voting stock.

Sub-subsidiary

A company controlled by a subsidiary of another company, creating a tiered structure of corporate ownership and governance.

Subsidiary Company

A company that is controlled by another company, usually referred to as the parent company, through ownership of more than half of its voting stock.

Parent Company

A corporation that owns controlling interest in one or more other companies, referred to as subsidiaries.