Vermont Co. has one foreign subsidiary. Its translation exposure is directly affected by each of the following, except:
A) the interest rate in the country of the subsidiary.
B) proportion of business conducted by the subsidiary.
C) its accounting method.
D) the exchange rate movements of the subsidiary's currency.

Question

Quizplus · Accepted Answer

Translation exposure is not directly affected by the interest rate in the country of the subsidiary; it is more related to exchange rate movements, the proportion of business conducted, and accounting methods.