Shareholders' exposure to currency risk is equal to ______.
A) assets less liabilities
B) credits less debits
C) net monetary assets plus real assets
D) the sum of transaction exposure and operating exposure
E) None of the above

Question

Quizplus · Accepted Answer

Shareholders' exposure to currency risk encompasses both transaction exposure, which relates to the effect of exchange rate movements on individual transactions, and operating exposure, which relates to the effect on a company's future cash flows and earnings. Together, these exposures determine how changes in exchange rates can impact the value of a company to its shareholders.

Shareholders' Exposure to Currency Risk Is Equal to ______