As opposed to transaction exposure, managing economic exposure involves developing a(n) ____ solution.

Question

Quizplus · Accepted Answer

Economic exposure deals with long-term risks related to changes in exchange rates and requires a long-term solution, such as diversification of markets, hedging with derivatives, or adjusting pricing strategies. Short-term solutions may not be effective in managing economic exposure. Immediate solutions may also not be appropriate as economic exposure involves risks that occur over a longer time horizon.

As Opposed to Transaction Exposure, Managing Economic Exposure Involves Developing