_______ is the risk that arises from the effects of unexpected fluctuations in foreign exchange rates on the net present value of a corporation's future cash flows.
A) Accounting exposure
B) Economic exposure
C) Macro-political risk
D) Micro-political risk

Question

Quizplus · Accepted Answer

Economic exposure arises from the impact of unexpected fluctuations in foreign exchange rates on a company's future cash flows. It reflects the potential impact of currency risk on the company's value and results from the exposure to macroeconomic factors like interest rates and inflation. Accounting exposure, on the other hand, arises from the impact of currency movements on a company's financial statements, while political risks relate to the impact of political events on a company's operations.

_______ Is the Risk That Arises from the Effects of Unexpected