A company that is preparing a report on its current net cash-flow exposures to foreign exchange risk is only concerned with its net foreign currency cash exposure.Which of the following items are necessary for the report?
i.Timing of each transaction
ii.Amount of each receivable and payable
iii.Country of origin of foreign cash flow
iv.Currency of each transaction
A) i, ii, iii
B) i, ii, iv
C) i, iii, iv
D) ii, iii, iv

Question

Quizplus · Accepted Answer

The company is only concerned with its net foreign currency cash exposure, which is calculated by subtracting the foreign currency payable from the foreign currency receivable. Therefore, only the timing and amount of each transaction and the currency of each transaction are necessary for the report. The country of origin of foreign cash flow is not relevant to calculating the net exposure.

A Company That Is Preparing a Report on Its Current