Question: 5.2) Which three statements regarding the different types of foreign exchange exposure are true? A Translation risk affects every company, even if it has no
5.2) Which three statements regarding the different types of foreign exchange exposure are true? A Translation risk affects every company, even if it has no international operations. B Economic risks includes not only the price effect on existing transaction, but also the quantity effect on future goods sold. C Transaction risk is asymmetric and non-linear due to its long term nature. D Operational flexibility is a very efficient way to address economic exchange rate risks. E Transaction risk can be mitigated by marketing and by creating high switching costs for customers. F Translation risk does not affect a companys cash-flows. It causes book losses, unless the assets in question will be sold in the near future.
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