Question

An example of transaction exposure is when: a. companies have obligations for the purchase of foreign goods at previously agreed prices. b. the cash flow from future exports falls. c. there is an impact of currency exchange rate changes on the reported financial statements of a company. d. there is a long-term effect of changes in exchange rates.

Answer 1

Answer:

The correct answer is the option C: there is an impact of currency exchange rate changes on the reported financial statements of a company.

Explanation:

To begin with, the concept of ''transaction exposure'' is known in the world of business as the situation that implicates certain risks at the time of buying something internationally, more like, the levels of uncertainty that the company will face when purchasing when abroad companies. Moreover, it implicates the risks that currency exchange rates will fluctuate after a firm has already taken a financial obligation and therefore that an example would be the impact of a currency exchange rates chages on the reported financial statements of a company.