Transaction exposure deals with cash flows that result from existing contractual obligations.
The degree of uncertainty that businesses engaged in international trade must deal with is known as transaction exposure. It is also known as translation exposure or translation risk .
It is specifically the risk that exchange rates will change after a company has already committed to a financial obligation. These foreign enterprises are extremely vulnerable to changing exchange rates, which can result in significant capital losses.
Transaction exposure often carries only one side of the risk. The only company that might experience this vulnerability is one that completes a transaction in a foreign currency.
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Answer:
Inductive approach
Explanation:
The inductive approach is the approach of research in which a person chooses his/her interesting topic for further research. He/she collect the data for research. When the researcher collects the data, then the researcher took breather data from data collection.
A birds-eye has been taken on a collection of data. The researcher will take a look at data and try to develop theory related research and will explain it.
When any of the research takes a look at this pattern, the researcher will observe the set of rules and reached a general idea of the proposition about the experience during research. Researchers transform from data collection to theory development. This approach is based on specific to general ideas.
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