What is the impact of currency realignment on the earnings ability of a foreign operation known as?
A)Economic exposure
B)Accounting exposure
C)Exchange rate exposure
D)International exposure

Question

Quizplus · Accepted Answer

Economic exposure, also known as operating exposure, refers to the impact of currency fluctuations on a company's future cash flows and therefore its market value. It encompasses the effect of currency changes on the company's future sales, costs, and ultimately on its earnings and competitive position, beyond mere accounting or transactional impacts.

What Is the Impact of Currency Realignment on the Earnings