Translation exposure reflects:

Question

​Translation exposure reflects:

Quizplus · Accepted Answer

Translation exposure refers to the impact of exchange rate fluctuations on a company's financial statements. This arises when a company has foreign subsidiaries or assets and liabilities denominated in a foreign currency that need to be translated into the company's reporting currency for accounting purposes. The translation of these items can result in gains or losses due to fluctuations in exchange rates. Option A is incorrect as it refers to transaction exposure, which involves the impact of exchange rate fluctuations on a company's transactions with foreign customers, suppliers, or creditors. Option B is incorrect as it is a reference to market exposure or market risk, which is the risk associated with changes in the market value of a company's assets or liabilities. Option D is incorrect as it refers to operating exposure or economic exposure, which is the impact of exchange rate fluctuations on a company's future cash flows and profits.

​Translation Exposure Reflects

Translation Exposure Reflects