The risk exposure that occurs between the time of entering into a transaction and the time of settling it is referred to as:
A) translation (accounting) exposure.
B) transaction exposure.
C) economic exposure.
D) business risk.

Question

Quizplus · Accepted Answer

Transaction exposure refers to the risk exposure that occurs between the time of entering into a transaction and the time of settling it, including the risk of changes in exchange rates during that period. Translation exposure refers to the risk of changes in exchange rates on the value of assets and liabilities denominated in foreign currencies. Economic exposure refers to the risk of changes in exchange rates on the underlying cash flows and profitability of a company's operations. Business risk refers to the overall risk of a company's operations, including factors such as competition, market conditions, and management decisions.

The Risk Exposure That Occurs Between the Time of Entering