If a firm does not have foreign subsidiaries, it is not subject to ____.

Question

Quizplus · Accepted Answer

Translation exposure refers to the potential impact of currency fluctuations on a firm's financial statements, particularly when translating the financial statements of foreign subsidiaries back into the home currency. If a firm does not have foreign subsidiaries, it does not have translation exposure. Transaction exposure and economic exposure both refer to the potential impact of currency fluctuations on a firm's operations, and can arise even if a firm does not have foreign subsidiaries.

If a Firm Does Not Have Foreign Subsidiaries, It Is