Exposure to currency risk can be measured by the sensitivities of

Question

Quizplus · Accepted Answer

Exposure to currency risk can arise from both the future home currency values of the firm's assets and liabilities, as well as the impact of exchange rate fluctuations on the firm's operating cash flows. Therefore, the sensitivities of both the firm's financial and operational variables need to be measured to assess currency risk accurately. Option C is the only choice that includes both measurements.

Exposure to Currency Risk Can Be Measured by the Sensitivities