The Source of Translation Exposure

question 41

Multiple Choice

The source of translation exposure

• A)is a mismatch of net assets and net liabilities denominated in the same currency.
• B)is a mismatch of net assets and net liabilities denominated in different currencies.
• C)is a mismatch of current assets and current liabilities denominated in different currencies.
• D)none of the above

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Definitions:

Framing Error

A mistake in decision-making caused by misrepresenting or misinterpreting the context or information surrounding the decision.

Escalating Commitment

The phenomenon of individuals or organizations continuing to invest in a decision, project, or course of action despite evidence of its failure.

Anchoring Bias

A cognitive bias where an individual depends too heavily on an initial piece of information (the "anchor") when making decisions.

Escalating Commitment

A behavioral pattern where an individual or organization continues to follow a failing course of action due to emotional attachment or the desire to justify prior investments.