When a company with a foreign subsidiary needs to arrange funding in a foreign currency to pay its foreign employees,it faces:
A) accounting exposure.
B) economic exposure.
C) operating exposure.
D) translation exposure.

Question

Quizplus · Accepted Answer

Operating exposure, also known as economic exposure, deals with the impact of exchange rate fluctuations on a company's future cash flows and operations, such as the costs of paying foreign employees.

When a Company with a Foreign Subsidiary Needs to Arrange