Which of the following is not true regarding economic exposure?
A) Even purely domestic firms can be affected by economic exposure.
B) In general, depreciation of the firm's local currency causes a decrease in both cash inflows and outflows.
C) The degree of economic exposure will likely be much greater for a firm involved in international business than for a purely domestic firm.
D) The impact of a change in the local currency on inflow and outflow variables can sometimes be indirect and therefore different from what is expected.
E) All of the above are true.

Question

Quizplus · Accepted Answer

Depreciation of the local currency typically increases cash inflows from exports and decreases cash outflows for imports, not the opposite.

Which of the Following Is Not True Regarding Economic Exposure