The Link Between a Firm's Future Operating Cash Flows and Exchange

question 90

Multiple Choice

The link between a firm's future operating cash flows and exchange rate fluctuations is

• A)asset exposure.
• B)operating exposure.
• C)both a and b
• D)none of the above

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Definitions:

Perfectly Price Inelastic

A market situation where the quantity demanded of a good does not change in response to changes in its price.

Total Income

The sum of all earnings obtained from work, investments, and other sources before any taxes or deductions.

Perfectly Price Elastic

Describes a situation where the quantity demanded or supplied changes infinitely in response to any change in price.

Luxury Good

A high-end item that is not necessary for living but is deemed as highly desirable within a culture or society.