Transaction Exposure

question 10

Multiple Choice

Transaction exposure:

• A) measures the extent to which foreign exchange volatility may affect a firm's future ongoing revenues and costs.
• B) measures the effects of FX changes on the balance sheet of the firm.
• C) refers to the extent to which the value of the firm's cash flows may be affected by changes in the exchange rate.
• D) tries to measure the impact of unexpected exchange rate fluctuations on the net present value of the firm's future cash flows.

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Definitions:

Reinforcers

Stimuli that increase the likelihood of a behavior being repeated, can be positive (adding something desirable) or negative (removing something undesirable).

Learning Sets

The capability to learn more efficiently and effectively based on the experiences gained from solving previous problems.

Insight Learning

A form of cognitive learning where problem-solving occurs through a sudden understanding or epiphany rather than by trial and error.

Law of Effect

A psychological principle suggesting that behaviors followed by favorable consequences become more likely, and behaviors followed by unfavorable consequences become less likely.