The exposure that is based on the extent to which the value of the firm will change when future exchange rates change is known as

Question

Quizplus · Accepted Answer

The exposure described in the question is economic exposure, which reflects the impact of changes in exchange rates on the overall value of a firm. Translation exposure refers to the impact of exchange rate fluctuations on the financial statements when they are translated into a different currency, while transaction exposure relates to the impact of exchange rate fluctuations on specific transactions. Accounting exposure is another term for translation exposure.

The Exposure That Is Based on the Extent to Which