Vada, Inc. exports computers to Australia invoiced in U.S. dollars. Its main competitor is located in Japan. Vada is subject to:
A) economic exposure.
B) transaction exposure.
C) translation exposure.
D) economic and transaction exposure.

Question

Quizplus · Accepted Answer

Vada is subject to economic exposure because the value of the U.S. dollar relative to the Australian dollar will affect the competitiveness of Vada's products in Australia. Vada is also subject to transaction exposure because the value of the U.S. dollar relative to the Japanese yen will affect the cost of Vada's products in Japan.

Vada, Inc Exports Computers to Australia Invoiced in U