Exchange Rate Exposure:
The degree of risk face by the company due to the fluctuation of the exchange rate.
- Transaction Exposure
- Economic Exposure
- Translational Exposure
Transaction Exposure:
The degree of the risk face by the company on its cash inflows and outflows due to exchange rate fluctuation.
Economic Exposure:
The degree of the risk face by the company due to the economic condition of the country which effects the exchange rate and it effect the company.
Translational Exposure:
The degree of risk face by the sub-branch when it convert its profit or low in the parents country currency.
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