_____________ measures the change in the present value of the firm resulting from any change in the future operating cash flows of the firm caused by an unexpected change in exchange rates and macroeconomic factors.
A) Economic exposure
B) Translation exposure
C) Light exposure
D) Foreign exchange exposure

Question

Quizplus · Accepted Answer

Economic exposure measures the impact of unexpected changes in exchange rates and macroeconomic factors on the present value of the firm's future operating cash flows. Translation exposure is the impact of changes in exchange rates on the financial statements of the firm, and light exposure and foreign exchange exposure are not relevant terms in this context.

_____________ Measures the Change in the Present Value of the Firm