An Australian Company with Subsidiary Operations in a Number of International

question 57

Multiple Choice

An Australian company with subsidiary operations in a number of international markets has an audit into its financial risk exposures that reveals it has a potential exposure to translation risk.Which of the following statements relates to its translation risk exposure?

• A) The company has export contracts written in USD receipts over the next twelve months.
• B) Interest repayments on euromarket funding are payable in DEM.
• C) Assets and liabilities of its subsidiary companies are denominated in foreign currencies.
• D) All of the given answers are correct.

---

Definitions:

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on-demand or at a set time, with the payee able to transfer it to another holder.

Transferred

Moved or shifted from one place, person, or entity to another.

Claim in Recoupment

A legal claim made by a defendant in a lawsuit to offset or reduce the amount of damages claimed by the plaintiff, based on related transactions.

Instrument

In legal and financial contexts, a formal document, such as a contract, will, or security, that has a legal effect or is meant to convey rights or obligations.