What Is Another Term for "Balance Sheet Exposure

question 52

Multiple Choice

What is another term for "balance sheet exposure?"

• A) Transaction exposure
• B) Exchange exposure
• C) Translation exposure
• D) Negative exposure

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Definitions:

Hedge Effectiveness

A measure of how well a hedge transaction reduces the risk of the exposure that the hedge was intended to protect against.

Economic Relationship

Refers to the interactions between different economic variables or entities, such as the connection between supply and demand or investment and economic growth.

Hedge Ratio

A ratio used to measure the proportion of a position that is hedged, indicating the effectiveness of a hedge against fluctuations.

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, or some component thereof, that is attributable to a particular risk and could affect profit or loss.