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When an enterprise has a receivable or payable denominated in a foreign currency and settlement of the obligation has not yet taken place, that firm is said to have __________ exposure.

When an enterprise has a receivable or payable denominated in a foreign currency and settlement of the obligation has not yet taken place, that firm is said to have __________ exposure.

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Let us understand first of all different types of exposure:

Transaction exposure
It is the extent to which given exchanges rate change will change the value of foreign currency denominated transactions already entered into.

Translation (Accounting) exposure
The change in the value of a firm's foreign currency denominated accounts due to a ...

Solution Summary

Your tutorial discusses the five kinds of exposure to help you know how to respond.

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