The three primary types of exposure that currency risks create for a firm are:
A)transaction exposure,interest rate exposure,and translation exposure.
B)profit/loss exposure,interest rate exposure,and economic exposure.
C)economic exposure,financial exposure,and translation exposure.
D)transaction exposure,economic exposure,and translation exposure.

Question

Quizplus · Accepted Answer

Transaction exposure, economic exposure, and translation exposure are the three primary types of exposure that currency risks create for a firm. 
- Transaction exposure refers to the risk of loss from the changing value of a currency during a transaction, such as when a company buys or sells goods and services in a foreign currency. 
- Economic exposure refers to the risk of loss from overall changes in exchange rates affecting a company's entire operations and future cash flows. 
- Translation exposure refers to the risk of loss from translating financial statements into another currency for reporting purposes. 
Therefore, option D is the correct answer.

The Three Primary Types of Exposure That Currency Risks Create