The Extent to Which the Value of the Firm Would

question 6

Multiple Choice

The extent to which the value of the firm would be affected by expected changes in the exchange rate is

• A)transaction exposure.
• B)translation exposure.
• C)economic exposure.
• D)none of the above

---

Definitions:

Savings and Loan

Financial institutions that primarily promote savings and provide loans for housing.

Medium of Exchange

A go-between resource or framework designed to support the transfer, acquisition, or exchange of commodities among participants.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision.

Foregone Interest

The potential interest income lost by choosing an alternative investment or spending decision instead of the present option that yields interest.