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Distinguish between the following types of foreign exchange exposure: Transaction exposure Economic exposure Translation exposure Given 1 example for each.

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Finance

Distinguish between the following types of foreign exchangeexposure:

  1. Transaction exposure
  2. Economic exposure
  3. Translation exposure

Given 1 example for each.

Answer & Explanation Solved by verified expert
4.2 Ratings (744 Votes)
Transaction exposure occurs when companies buy or sell in different currencies It occurs when there is international trade There is actual cash outflow or inflow Hence there is actual profit or loss Example If a US based company buys a product from India and the payment is to be    See Answer
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Distinguish between the following types of foreign exchangeexposure:Transaction exposureEconomic exposureTranslation exposureGiven 1 example for each.

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