Long-term financial risk arising from permanent changes in prices or other market fundamentals is called ___________________.
A) risk maximization
B) volatility maximization
C) economic exposure
D) transactions exposure
E) translation exposure

Question

Quizplus · Accepted Answer

Economic exposure refers to the degree to which a company's present value of future cash flows can be influenced by exchange rate fluctuations. It is a measure of the long-term impact of changes in exchange rates on a company's future cash flows and overall financial position, beyond the immediate effects of transactions or translation exposures.

Long-Term Financial Risk Arising from Permanent Changes in Prices or Other