Most managers would prefer to be protected against transaction rather than translation losses because
A) transaction loses are realized cash loses.
B) Wall-street analysts do not account for CTA.
C) potential transaction loses are bigger than the translational loses.
D) translation losses are not recognized in the consolidated financial statements.

Question

Quizplus · Accepted Answer

Transaction losses are realized cash losses and directly impact the company's financial position. On the other hand, translation losses only affect the reported financial statements and do not impact the company's cash position. Hence, most managers would prefer to be protected against transaction losses.

Most Managers Would Prefer to Be Protected Against Transaction Rather