Anticipated cash inflows may fall in value if unexpected movements in the exchange rate hurt your ability to convert the foreign currency into domestic currency.This reduction in the conversion of future payments is called ________.

Question

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Transaction exposure refers to the risk associated with the actual transactions in foreign currencies, such as receivables or payables, whose value may change due to fluctuations in exchange rates between the time the transaction is initiated and the time it is settled.

Anticipated Cash Inflows May Fall in Value If Unexpected Movements