Economic exposure results from:

Question

Quizplus · Accepted Answer

Economic exposure is the risk of fluctuations in future cash flows resulting from changes in exchange rates. It involves both operating exposure (which refers to the impact of changes in exchange rates on a company's ongoing operations) and financial exposure (which results from changes in the value of a company's financial assets and liabilities denominated in foreign currencies). Therefore, both options A and B are correct. Option D is not relevant to the concept of economic exposure.

Economic Exposure Results From