The Risk for a Company That Future Foreign Currency Denominated

question 87

Multiple Choice

The risk for a company that future foreign currency denominated cash flows will vary owing to exchange rate movements is:

• A) accounting exposure.
• B) economic exposure.
• C) transaction exposure.
• D) translation exposure.

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Definitions:

Long Run

A period in economics where all inputs can be adjusted, allowing for full analysis of production, pricing, and employment levels.

Profit Or Loss

The financial result of a business's operations, calculated as the difference between revenue and expenses.

Maximizing Profits

The process of making the most financial gain possible from business operations, through various strategies such as cost reduction, revenue increase, or efficiency improvements.

Profit Maximizes

Refers to strategies or actions companies undertake to increase their profits to the highest possible level.