A Firm's Operating Exposure Is

question 14

Multiple Choice

A firm's operating exposure is:

• A) defined as the extent to which the firm's operating cash flows would be affected by the random changes in exchange rates.
• B) determined by the structure of the markets in which the firm sources its inputs, such as labor and materials, and sells its products.
• C) determined by the firm's ability to mitigate the effect of exchange rate changes by adjusting its markets, product mix, and sourcing.
• D) all of these

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Definitions:

Self-serving Bias

The common tendency to attribute successes to personal characteristics and failures to external factors.

Situational Factors

External influences or conditions that affect decision-making, behavior, or performance in varying scenarios.

External-unstable Factor

refers to outside influences that can affect behavior or outcomes but are inconsistent and unpredictable, such as luck or chance.

Pessimistic Explanatory

A cognitive style where individuals habitually attribute negative events to stable, global, and internal causes.