Which of the following is an example of economic exposure but not an example of transaction exposure?
A) An increase in the dollar's value hurts a U.S. firm's domestic sales because foreign competitors are able to increase their sales to U.S. customers.
B) An increase in the pound's value increases a U.S. firm's cost of British pound payables.
C) A decrease in the peso's value decreases a U.S. firm's dollar value of peso receivables.
D) A decrease in the Swiss franc's value decreases the dollar value of interest payments on a Swiss deposit sent to a U.S. firm by a Swiss bank.
Correct Answer:
Verified
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