When a firm's competitive position in its industry deteriorates because of changes in currency value,that change is known as:
A)industry exposure.
B)currency exposure.
C)competitive exposure.
D)market exposure.

Question

Quizplus · Accepted Answer

Competitive exposure refers to the effect of changes in exchange rates on a company's competitive position relative to other firms in the industry. This exposure arises due to changes in the relative prices of inputs and outputs in different countries. A decline in the value of the firm's currency can make imports cheaper and exports more expensive, thereby making the firm less competitive compared to its rivals in the industry. Industry exposure refers to broader economic changes that affect the entire industry, while currency exposure refers to the direct impact of changes in foreign currency rates on the value of a company's assets and liabilities. Market exposure refers to the impact of changes in interest rates and economic conditions on the overall stock market.

When a Firm's Competitive Position in Its Industry Deteriorates Because