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6) Address the exposure of Ralph Lauren to each of the following exposures: a. Transaction exposure: change in cash flows that result from existing contractual
6) Address the exposure of Ralph Lauren to each of the following exposures:
a. Transaction exposure: change in cash flows that result from existing contractual obligations. Give an example of a transaction exposure that arises from borrowing in a foreign currency.
b. Translation exposure: potential for accounting-derived changes.
c. Operating exposure: (economic competitive or strategic) depends on the effect of the exchange rate change on future sales volume, prices, and costs.
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