Which of the Following Statements Is Incorrect

question 34

Multiple Choice

Which of the following statements is incorrect?

• A) Transaction exposure represents only the exchange rate risk when converting net foreign cash inflows to U.S. dollars or when purchasing foreign currencies to send payments.
• B) Economic exposure represents any impact of exchange rate fluctuations on a firm's future cash flows.
• C) Firms can simply focus on hedging their foreign currency payables and/or receivables to hedge economic exposure.
• D) The management of economic exposure tends to serve as a long-term solution rather than just a short-term solution.

---

Definitions:

English Noblemen

Members of the British aristocracy, historically endowed with specific privileges, titles, and responsibilities in the social and political hierarchy.

Roger Williams

A Puritan minister, theologian, and author who founded the Colony of Rhode Island and the Providence Plantations, advocating for separation of church and state and religious freedom.

Religious Independence

The freedom of religious groups to practice their faith without interference or control by the government or other religious authorities.

Fairer Treatment

Practices or policies aimed at ensuring more equitable and just treatment of individuals or groups, often focusing on reducing disparities and discriminations.