Economic exposure,a category of foreign exchange risk,is distinct from transaction exposure,which is concerned with the effect of exchange rate changes on individual transactions,most of which are short-term affairs that will be executed within a few weeks or months.

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Economic exposure is a long-term risk related to the overall operations and competitiveness of a company, while transaction exposure is focused on the impact of exchange rate fluctuations on individual transactions in the short term.

Economic Exposure,a Category of Foreign Exchange Risk,is Distinct from Transaction