Transaction exposure results when an MNC translates each subsidiary's financial data to its home currency for consolidated financial statements.

Question

Quizplus · Accepted Answer

Transaction exposure arises from the effect of exchange rate fluctuations on a company's financial obligations, not from the translation of financial statements. Translation exposure is the risk associated with converting financial statements of foreign subsidiaries into the parent company's currency.

Transaction Exposure Results When an MNC Translates Each Subsidiary's Financial