The Three Primary Types of Exposure That Currency Risks Create

question 8

Multiple Choice

The three primary types of exposure that currency risks create for a firm are:

• A)transaction exposure,interest rate exposure,and translation exposure.
• B)profit/loss exposure,interest rate exposure,and economic exposure.
• C)economic exposure,financial exposure,and translation exposure.
• D)transaction exposure,economic exposure,and translation exposure.

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Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from total revenue, indicating the company's profit.

Year 1

A term typically used to refer to the first year of an activity, study, or business operation.

Liquidity Ratios

Financial metrics used to evaluate a company's ability to meet its short-term obligations, indicating its financial health.

Short-Term Debt

Financial obligations and loans that are due to be paid back within a year from the balance sheet date.