A company may become more exposed or sensitive to an individual currency's movements over time for several reasons, including a reduction in hedging, a greater involvement in the foreign country, or an increased use of the foreign currency.

Question

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When a company reduces its hedging, enters into greater involvement in the foreign country or increases its use of foreign currency, it increases its exposure or sensitivity to fluctuations in that particular currency's movements.

A Company May Become More Exposed or Sensitive to an Individual