Which of the Following Describes the Difference Between Transaction Exposure

question 25

Multiple Choice

Which of the following describes the difference between transaction exposure and translation exposure?

• A) Translation exposure derives from a company's foreign-currency-denominated cash flows, and transaction exposure derives from the foreign assets and liabilities being consolidated onto the parent company's financial statements.
• B) Transaction exposure derives from a company's foreign-currency-denominated cash flows, and translation exposure derives from the foreign assets and liabilities being consolidated onto the parent company's financial statements.
• C) Translation exposure derives from a company's forward exchange contracts, and transaction exposure derives from the foreign assets and liabilities being consolidated onto the parent company's financial statements.
• D) Translation exposure derives from a company's foreign-currency-denominated cash flows, and transaction exposure derives from the company's forward exchange contracts.

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Definitions:

Madagascaran Mantid

A type of praying mantis native to Madagascar known for its unique adaptation and predatory behavior.

Camouflage

An adaptation that allows organisms to blend in with their environment, reducing visibility to predators or prey, and enhancing survival chances.

Adaptive

Having the ability to adjust to new conditions or environments, enhancing an organism's survival and reproductive success.

Antipredator Value

The effectiveness of an organism's physical or behavioral traits in deterring attacks from predators.