Which of the following refers to the extent to which the reported consolidated results and balance sheets of a corporation are affected by fluctuations in foreign exchange values?

Question

Quizplus · Accepted Answer

Translation exposure refers to the impact of exchange rate changes on the reported financial statements of a company. This includes the translation of foreign currency-denominated assets and liabilities, income, and expenses into the currency used for financial reporting. Economic exposure refers to the impact of exchange rate changes on a company's future cash flows and competitive position, while transaction exposure refers to the impact of exchange rate changes on specific transactions such as foreign currency-denominated sales or purchases. Countertrade and carry trade are not related to foreign exchange exposure.

Which of the Following Refers to the Extent to Which