________ exposure is far more important for the long-run health of a business than changes caused by ________ or ________ exposure.
A) Operating; translation; transaction
B) Transaction; operating; translation
C) Accounting; translation; transaction
D) Translation; operating; transaction

Question

Quizplus · Accepted Answer

Operating exposure refers to the impact of currency fluctuations on a company's future cash flows, while translation exposure refers to the impact of currency fluctuations on a company's financial statements, and transaction exposure refers to the impact of currency fluctuations on a specific transaction. Operating exposure is more important for the long-run health of a business as it affects the company's ability to generate future cash flows, which are essential for sustaining and growing the business. On the other hand, changes caused by translation or transaction exposure are relatively short-term and can often be hedged or managed through various financial instruments.

________ Exposure Is Far More Important for the Long-Run Health