Translation Exposure Measures

question 32

Multiple Choice

Translation exposure measures:

• A) changes in the value of outstanding financial obligations incurred prior to a change in exchange rates.
• B) the potential for an increase or decrease in the parent company's net worth and reported net income caused by a change in exchange rates since the last consolidation of international operations.
• C) an unexpected change in exchange rates impact on short run expected cash flows.
• D) none of the above

---

Definitions:

Consuming

The act of using up goods and services to satisfy wants or needs.

Maximizing Utility

The process of choosing the allocation of scarce resources that provides the highest possible satisfaction or happiness to an individual or society.

Marginal Utility

The change in overall satisfaction or utility obtained by consuming one additional unit of a good or service.

Total Utility

The total satisfaction received from consuming a particular quantity of goods and services.