What is an ad valorem import duty system?

A)A requirement that a parent buy the output of a foreign subsidiary.

B)A tariff charged by a government on the invoice price of goods coming into its country.

C)A requirement that a subsidiary acquire its material inputs from a foreign parent.

D)A tax charged on intercompany transactions.

11.What is the primary difference between transaction exposure and translation exposure?

A)Transaction exposure results from changes in currency exchange rates, whereas translation exposure is the result of changes in accounting method.

B)Transaction exposure results in changes in cash flow, whereas translation exposure does not necessarily result in changes in cash flow.

C)Transaction exposure must be hedged, but translation exposure does not need to be hedged.

D)Transaction exposure affects only monetary assets and liabilities, whereas translation exposure affects all assets and liabilities.