Long-run exposure to exchange rate risk relates to:

Question

Quizplus · Accepted Answer

Long-run exposure refers to the potential impact on a company's cash flows and profits resulting from changes in relative economic conditions over a period of time. This can include changes in interest rates, inflation, and economic growth rates, which can all affect exchange rates. Daily variations in exchange rates (A), variances between spot and future rates (B), differences between future spot rates and related forward rates (D), and accounting gains and losses created by fluctuating exchange rates (E) are all components of short-term exchange rate risk.

Long-Run Exposure to Exchange Rate Risk Relates To