The risk exposure that occurs between the time of entering into a transaction and the time of settling it is referred to as:
A)Translation (accounting)exposure.
B)Transaction exposure.
C)Economic exposure.
D)Business risk.

Question

Quizplus · Accepted Answer

Transaction exposure refers to the risk of loss that arises from fluctuations in exchange rates between the time a transaction is agreed upon and the time it is settled. This type of risk is commonly associated with companies engaged in international trade or investment. Translation exposure refers to the risk that arises when a company's financial statements are converted from one currency to another, while economic exposure refers to the risk that a company's cash flows or market value will be affected by changes in exchange rates. Business risk, on the other hand, refers to the risk associated with a company's operations, such as changes in customer demand, competition, or regulatory environment.

The Risk Exposure That Occurs Between the Time of Entering