The type of exposure that measures the extent to which currency fluctuations can alter a company's future operating cash flows,that is,its future revenues and costs is known as
A)translation exposure
B)accounting exposure
C)transaction exposure
D)operating exposure

Question

Quizplus · Accepted Answer

Operating exposure measures the potential impact of exchange rate fluctuations on a company's future operating cash flows, which are influenced by future revenues and costs. Translation exposure relates to the impact of exchange rate fluctuations on a company's financial statements, while accounting exposure is the potential impact of exchange rate fluctuations on a company's tax liabilities and other financial obligations. Transaction exposure relates to the potential impact of exchange rate fluctuations on individual transactions or contracts.

The Type of Exposure That Measures the Extent to Which