________ risk measures the change in value of the firm that results from changes in future operating cash flows caused by unexpected changes in exchange rates.
A)Transaction
B)Accounting
C)Operating
D)Translation

Question

Quizplus · Accepted Answer

Operating risk measures the change in value of the firm that results from changes in future operating cash flows caused by unexpected changes in exchange rates. Transaction risk relates to the change in the value of a firm's contractual obligations that result from changes in exchange rates. Accounting risk is the risk that arises from the need to translate foreign currency financial statements into a reporting currency, and translation risk is similar to accounting risk but focuses on the impact of exchange rate changes on the value of foreign assets and liabilities.

________ Risk Measures the Change in Value of the Firm