Which of the Following Is an Example of Transaction Exposure

question 32

Multiple Choice

Which of the following is an example of transaction exposure?

• A)obligations for the purchase of goods at previously agreed prices
• B)borrowing of funds in domestic currency
• C)impact of currency exchange rate changes on the reported financial statements of a company
• D)long-term effect of changes in exchange rates
• E)effect of changing exchange rates on future prices,sales,and costs

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Definitions:

U.S. Interest Rates

U.S. interest rates are the rates at which interest is paid by borrowers for the use of money that they borrow from a lender, specifically within the United States.

Savings Account

A deposit account held at a bank or financial institution that earns interest and is designed for the purpose of saving rather than daily transactions.

Mortgage Loan

A loan used to purchase a piece of property, where the property itself serves as collateral for the loan.

Open-Market Sales

The selling of government securities in the open market to reduce the money supply and influence interest rates.