Economic exposure is far more important than translation exposure to the value of the multinational corporation.

Question

Quizplus · Accepted Answer

Economic exposure refers to the impact of fluctuating exchange rates on the present value of future cash flows while translation exposure only affects the accounting value of a multinational corporation's foreign assets and liabilities. Therefore, economic exposure is more significant to the overall value of the multinational corporation.

Economic Exposure Is Far More Important Than Translation Exposure to the Value