Which of the following best describes translation exposure?
A) Operating banks in a remote location with an uncommon language
B) Accounting exposure from translating interest rates from different regions
C) Translating financial statements from one currency to another
D) Creating more than one offshore branch

Question

Quizplus · Accepted Answer

Translation exposure refers to the risk companies face when they have to translate their financial statements from one currency to another. This can lead to fluctuations in their reported earnings and cash flows due to changes in exchange rates. Operating banks in a remote location, accounting exposure, and creating offshore branches do not necessarily relate to translation exposure.

Which of the Following Best Describes Translation Exposure