Currency exposure can be difficult to estimate because a firm is likely to be involved in multiple transactions in a currency at different times.This complication can be made simpler by:
A)eliminating the transactions at the extremes and focusing on the average transactions.
B)considering only the transaction that occur within a very short period of time.
C)considering only representative transactions.
D)netting the transactions so that the focus can be on the net effect of the transactions.

Question

Quizplus · Accepted Answer

Netting the transactions helps to simplify the estimation of currency exposure as it focuses on the overall net effect of the transactions instead of individual transactions. This approach reduces the complexity of analyzing multiple transactions in a currency at different times.

Currency Exposure Can Be Difficult to Estimate Because a Firm