Economic exposure is the risk resulting from the effects of changes in foreign exchange rates on a firm's value.

Question

Quizplus · Accepted Answer

Economic exposure is indeed the risk that a company faces due to changes in foreign exchange rates, which can affect the value of its assets, liabilities, and profits. This type of exposure is different from transaction and translation exposure and is typically associated with long-term investments and cash flows in foreign currencies.

Economic Exposure Is the Risk Resulting from the Effects of Changes