Generally speaking, a firm is subject to high degrees of operating exposure

Question

Quizplus · Accepted Answer

Operating exposure refers to the risk a company faces due to changes in exchange rates that can affect its costs, prices, and revenues. Therefore, a firm is subject to high degrees of operating exposure when either its costs or prices are sensitive to exchange rate changes. Option A only considers costs, while Option B only considers prices, making both choices incomplete. Option C encompasses both cases and is the correct answer. Option D is incorrect because a firm can indeed be subject to operating exposure.

Generally Speaking, a Firm Is Subject to High Degrees of Operating