Transaction exposure:
A) measures the extent to which foreign exchange volatility may affect a firm's future ongoing revenues and costs.
B) measures the effects of FX changes on the balance sheet of the firm.
C) refers to the extent to which the value of the firm's cash flows may be affected by changes in the exchange rate.
D) tries to measure the impact of unexpected exchange rate fluctuations on the net present value of the firm's future cash flows.

Question

Quizplus · Accepted Answer

The Answer of Transaction exposure:
A) measures the extent to which foreign exchange volatility may affect a firm's future ongoing revenues and costs.
B) measures the effects of FX changes on the balance sheet of the firm.
C) refers to the extent to which the value of the firm's cash flows may be affected by changes in the exchange rate.
D) tries to measure the impact of unexpected exchange rate fluctuations on the net present value of the firm's future cash flows.

Transaction Exposure