Purely domestic firms do not have any ____________ exposure,but they do have ___________________ exposure.

Question

Quizplus · Accepted Answer

Purely domestic firms do not have any currency exposure because they do not engage in cross-border transactions. However, they do have operating exposure, which relates to the potential impact of changes in operating cash flows due to factors like changes in demand, input prices, and competition. They may also have translation exposure if they have subsidiaries or investments denominated in foreign currencies, but this is not a given for all domestic firms. Market exposure would depend on their industry and the extent to which they are affected by macroeconomic factors like interest rates and GDP growth.

Purely Domestic Firms Do Not Have Any ____________ Exposure,but They