Which of the Following Is Not True Regarding Economic Exposure

question 64

Multiple Choice

Which of the following is not true regarding economic exposure?

• A) Even purely domestic firms can be affected by economic exposure.
• B) In general, depreciation of the firm's local currency causes a decrease in both cash inflows and outflows.
• C) The degree of economic exposure will likely be much greater for a firm involved in international business than for a purely domestic firm.
• D) The impact of a change in the local currency on inflow and outflow variables can sometimes be indirect and therefore different from what is expected.
• E) All of the above are true.

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Definitions:

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