Purchase Solution

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.

Not what you're looking for?

Ask Custom Question

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.

Purchase this Solution
Solution Summary

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

Solution Preview

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 ...

Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Operations Management

This quiz tests a student's knowledge about Operations Management

View More Free Quizzes
Related BrainMass Solutions

  • Economic and Transaction Exposure

    Transaction exposure is the currency risk when a firm faces contractual cash flows which are fixed (invoiced) in another currency - i,e, the firm is to receive or has to pay fixed amount of foreign currency in the future in the form of any receivable

  • Hedging Continual Economic Exposure

    foreign currencies o Borrowing or lending funds when repayment is to be made in a foreign currency o Being a party to an unperformed forward contract and o Otherwise acquiring assets or incurring liabilities denominated

  • international investment

    A call option is valuable, for example, when a firm has offered to buy a foreign asset, such as another firm, at a fixed foreign currency price but is uncertain whether its bid will be accepted.

  • International Business Finance-Exchange rate

    Transactions in the form of purchase contracts or agreements denominated in a foreign currency but which have not yet been settled create transaction exposure.

  • Mitigating Business Risks

    A call option is valuable, for example, when a firm has offered to buy a foreign asset, such as another firm, at a fixed foreign currency price but is uncertain whether its bid will be accepted.

  • Foreign Transaction vs Foreign Currency Transaction

    That is, a business (1) buys or sells on credit goods or services whose prices are denominated in a foreign currency or (2) borrows or lends funds whose amounts payable or receivable are denominated in a foreign currency.

  • Three month forward rate

    A call option is valuable, for example, when a firm has offered to buy a foreign asset, such as another firm, at a fixed foreign currency price but is uncertain whether its bid will be accepted.

  • Controlling Currency with Central Banks

    Provide a briefing describing when and why central banks buy either their own currency or the currency of another nation in an effort to control exchange rates. Foreign exchange refers to money denominated in the currency of another country.

  • Analyze "Currency Hedging" and describe how currency hedging is used in global financing operations

    A call option is valuable, for example, when a firm has offered to buy a foreign asset, such as another firm, at a fixed foreign currency price but is uncertain whether its bid will be accepted.

View More Related Solutions