Translation exposure refers to:
A)accounting exposure
B)the effect that an unanticipated change in exchange rates will have on the consolidated financial reports of an MNC
C)the change in the value of a foreign subsidiaries assets and liabilities denominated in a foreign currency, as a result of exchange rate change fluctuations, when viewed from the perspective of the parent firm
D)all of these

Question

Quizplus · Accepted Answer

Translation exposure refers to the accounting exposure that arises from the change in the value of a foreign subsidiary's assets and liabilities denominated in a foreign currency, as a result of exchange rate fluctuations, when viewed from the perspective of the parent firm. This affects the consolidated financial reports of an MNC, which is the effect referred to in option B. Therefore, option D is the correct answer as it includes all the options presented.

Translation Exposure Refers To