2 Jim Logan is considering a change in the pricing policy in which the foreign importer must pay in euros, so that Jim will not have to worry about converting pounds to euros every month. If implemented, would this policy eliminate the transaction exposure of the Sports Exports Company?

Would it eliminate Sports Exports’ economic exposure? Explain.

At the current time, the Sports Exports Company (Ireland) is willing to receive payments in British pounds for the monthly exports it sends to the United Kingdom. While all of its receivables are denominated in pounds, it has no payables in pounds or in any other foreign currency. Jim Logan, owner of the Sports Exports Company, wants to assess his firm’s exposure to exchange rate risk.