0 points
Time management is very much important in IIT JAM. The eduncle test series for IIT JAM Mathematical Statistics helped me a lot in this portion. I am very thankful to the test series I bought from eduncle.
Nilanjan Bhowmick AIR 3, CSIR NET (Earth Science)
- UGC NET
- Management
Which of the following fully capture foreign exchange risk exposure of an manufacturing enterprise?
(a) Transaction exposure (b) Economic exposure
(c) Translation exposure (d) Currency exposure
Choose the correct option :
Choose Your Answer:
0 Attempts
Submit Now
- 0 Likes
- 1 Comments
- 0 Shares
-
![comment-profile-img]()
>
Do You Want Better RANK in Your Exam?
Start Your Preparations with Eduncle’s FREE Study Material
- Updated Syllabus, Paper Pattern & Full Exam Details
- Sample Theory of Most Important Topic
- Model Test Paper with Detailed Solutions
- Last 5 Years Question Papers & Answers
Sign Up to Download FREE Study Material Worth Rs. 500/-
Eduncle Best Answer
Transaction exposure (or translation exposure) is the level of uncertainty businesses involved in international trade face. Specifically, it is the risk that currency exchange rates will fluctuate after a firm has already undertaken a financial obligation.
Economic exposure, also known as operating exposure refers to an effect caused on a company's cash flows due to unexpected currency rate fluctuations. Economic exposures are long-term in nature and have a substantial impact on a company's market value.
Translation exposure (also known as translation risk) is the risk that a company's equities, assets, liabilities, or income will change in value as a result of exchange rate changes. This occurs when a firm denominates a portion of its equities, assets, liabilities, or income in a foreign currency.
Currency exposure is a term referring to the vulnerability of an investment, cash flow or financial position to variations in the exchange rate of two currencies.