An exposure that arises from effects of exchange rate changes on the competitive position of the company is called an economic exposure.

Question

Quizplus · Accepted Answer

Economic exposure refers to the risk incurred by a company due to the effect of exchange rate changes on its competitive position. This exposure is different from transactional and translational exposures, which arise from specific transactions or accounting adjustments related to foreign currency.

An Exposure That Arises from Effects of Exchange Rate Changes