Anticipated Cash Inflows May Fall in Value If Unexpected Movements

question 71

Multiple Choice

Anticipated cash inflows may fall in value if unexpected movements in the exchange rate hurt your ability to convert the foreign currency into domestic currency.This reduction in the conversion of future payments is called ________.

• A)translation exposure
• B)transaction exposure
• C)conversion exposure
• D)operating exposure

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Definitions:

Proximity Hypothesis

The theory that individuals will form relationships or have positive feelings towards things or people that are physically close to them.

Frequency Paradox

A concept indicating the mismatch between the perceived frequency of occurrence of an event and its actual frequency.

Expert Power

The influence one possesses owing to one's expertise, skills, or knowledge in a specific domain.

Referral

The act of directing someone to a different place or person for information, help, or action.