________ is the currency risk that results from exchange-rate fluctuations affecting the pricing of products, the cost of inputs, and the value of foreign investments.
A)Translation exposure
B)Operating exposure
C)Transaction exposure
D)Interoceptive exposure

Question

Quizplus · Accepted Answer

Operating exposure is the currency risk that arises from exchange-rate fluctuations impacting the pricing of products, the cost of inputs, and the value of foreign investments. This risk affects a company's operating cash flows and profitability, leading to potential losses or gains. Translation exposure primarily relates to the impact of exchange rate fluctuations on a company's financial statements, while transaction exposure is the risk of loss from a change in exchange rates between the transaction date and settlement date. Interoceptive exposure is not a recognized term in finance or economics.

________ Is the Currency Risk That Results from Exchange-Rate Fluctuations