The risk exposure resulting from the translation of foreign-currency-denominated financial risks is referred to as:
A) translation (accounting) exposure.
B) transaction exposure.
C) economic exposure.
D)business risk.

Question

Quizplus · Accepted Answer

Translation exposure refers to the risk faced by a company that has assets or liabilities denominated in a foreign currency, due to the potential impact of currency fluctuations on the company's financial statements. This exposure arises from the translation of financial data from one currency to another, typically for the purpose of consolidating financial statements or for reporting purposes. Translation exposure is one form of foreign exchange risk that companies need to manage in order to mitigate the potential impact of currency fluctuations on their financial performance.

The Risk Exposure Resulting from the Translation of Foreign-Currency-Denominated Financial