A multinational with a large number of receivables runs the risk of transaction exposure.

Question

Quizplus · Accepted Answer

Transaction exposure is the risk of adverse effects on the value of financial obligations due to fluctuations in exchange rates. A multinational with a large number of receivables, which are payments owed to the company in different currencies, is exposed to transaction risk as fluctuations in exchange rates could affect the value of the receivables when they are converted back to the company's functional currency.

A Multinational with a Large Number of Receivables Runs the Risk