Transaction exposure could arise when borrowing or lending funds when repayment is to be made in the firm's domestic currency.

Question

Quizplus · Accepted Answer

Transaction exposure arises from the possibility of exchange rate fluctuations affecting the value of a company's financial transactions, but if repayment is in the firm's domestic currency, there is no currency exchange risk involved in the transaction.

Transaction Exposure Could Arise When Borrowing or Lending Funds When