____ exposure occurs when an MNC translates each subsidiary's financial data to its home currency for consolidated financial statements.

Question

Quizplus · Accepted Answer

Translation exposure is the risk faced by MNCs when they convert financial statements of their subsidiaries, which are in foreign currency, into the home currency for preparing consolidated financial statements. This process of translation may lead to gains or losses due to fluctuations in currency exchange rates. Hence, the correct choice is A) Translation.

____ Exposure Occurs When an MNC Translates Each Subsidiary's Financial