Economics · International Finance
Match List I (Type of Exposure) with List II (Description) in international financial management: List I: (A) Economic Exposure (B) Translation Exposure (C) Transaction Exposure (D) Operating Exposure List II: (I) Potential changes in all future cash flows of a firm that result from unanticipated changes in exchange rates. (II) Arises when items of financial statements stated in foreign currencies are restated in the home currency of an MNC. (III) Arises when a firm's contract obligations are exposed to unanticipated changes in exchange rates. (IV) When a firm's real assets are exposed to unanticipated changes in exchange rates. Choose the correct matching option:
- 1(A) - (I), (B) - (IV), (C) - (III), (D) - (II)
- 2(A) - (IV), (B) - (III), (C) - (II), (D) - (I)
- 3(A) - (I), (B) - (II), (C) - (III), (D) - (IV)✓
- 4(A) - (III), (B) - (IV), (C) - (II), (D) - (I)
Correct answer
(A) - (I), (B) - (II), (C) - (III), (D) - (IV)
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