Lazer Co. is a U.S. firm that exports computers to Belgium invoiced in euros and to Italy invoiced in dollars. Additionally, Lazer Co. has a subsidiary in Korea that produces computers in South Korea and sells them there. Lazer also has competitors in different countries. Lazer Co. is subject to:
A) transaction exposure.
B) economic exposure.
C) translation exposure.
D) all of the above.

Question

Quizplus · Accepted Answer

Lazer Co. is subject to all three types of foreign exchange exposure: transaction exposure (due to invoicing in different currencies), economic exposure (due to competition in different countries), and translation exposure (due to the subsidiary in Korea and potential translation of financial statements).

Lazer Co Is a U