Question
5.3) Which three statements regarding the different types of foreign exchange exposure are true? A Translation risk affects a companys operational cash-flows immediately. B Economic
5.3) Which three statements regarding the different types of foreign exchange exposure are true? A Translation risk affects a companys operational cash-flows immediately. B Economic risks includes not only the price effect on existing transaction, but also the quantity effect on fewer future goods sold. C Operational flexibility is a very efficient way to address economic risks. D Transaction risk is asymmetric and non-linear due to its long term nature. E Economic risk can be mitigated by marketing and by increasing high switching costs for customers. F Transaction risk is closely regulated in IFRS and IAS and is closely related to accounting.
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