Which of the following does NOT relate to a transaction exposure being undertaken by a company?
A) A contract denominated in US dollars to purchase US goods
B) Borrowing yen from a Japanese bank
C) The incorporation of a New Zealand subsidiary onto the Australian parent company balance sheet
D) Selling Australian goods to Germany

Question

Quizplus · Accepted Answer

The incorporation of a New Zealand subsidiary onto the Australian parent company balance sheet does not relate to transaction exposure as it is a matter of accounting and financial reporting, rather than a direct exposure to currency fluctuations or foreign exchange risk. The other options involve foreign currency transactions and therefore may expose the company to transaction exposure.

Which of the Following Does NOT Relate to a Transaction