Question

What type of international risk exposure measures the change in present value of a firm resulting from changes in future operating cash flows caused by any unexpected change in exchange rates?a) transaction exposure.b) accounting exposure.c) operating exposure.d) translation exposure.

Answer 1

Answer:

operating exposure

Explanation:

Based on the scenario being described within the question it can be said that the term being mentioned is known as operating exposure and deals with the company's operations over various months or years and the changes incurred due to unexpected changes in the exchange rate. The exchange rate is the price at which one currency is traded for another. Drastic changes in these rates can cause assets value to decline drastically.