_____ risk is associated with the short-term effects of currency movements on the consolidated accounting statements of a firm.

Question

Quizplus · Accepted Answer

Translation risk, also known as accounting exposure, arises from the need to convert foreign currencies into the parent company's currency when preparing consolidated financial statements. This can affect the reported earnings and equity of a company due to fluctuations in exchange rates.

_____ Risk Is Associated with the Short-Term Effects of Currency