A firm's transaction exposure in any foreign currency is based solely on the size of its open position in that currency.

Name: A firm's transaction exposure in any foreign currency is based solely on the size of its open position in that currency.
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Transaction exposure also depends on the timing of the cash flows, the volatility of the currency exchange rate, and the firm's ability to adjust its market operations in response to exchange rate changes, not just the size of its open position.

A Firm's Transaction Exposure in Any Foreign Currency Is Based