As discussed in its FY 2020 10-K, Nike has to convert USD into foreign currencies for foreign advertising, promotion, product and other costs. There is usually a time lag of 30 or 60 days or so between an advertising event, for example, and when Nike has to pay the foreign advertiser. At the time of the event when the cost is incurred, Nike would book this as Accounts Payable. Between the time of booking an Accounts Payable and later converting USD to foreign currency to make payment to the foreign advertiser, there are exchange rate changes in the Forex market. Nike's advertising expenses decreased 4% in FY 2020 compared to FY 2019. Of this 4% advertising expense decrease, half of it (2%) was caused by foreign currency exchange rate changes. Which change in foreign currency exchange rates would decrease Nikes foreign advertising expenses? Group of answer choices USD strengthened against foreign currencies, year over year Foreign currencies strengthened against USD, year over year

The above Question discusses Foreign Currency Risk that arises when Nike converts all foreign currencies into USD for consolidated reporting. For quarterly consolidated reports (10-Qs) and annual consolidated reports (10-Ks), all line items in Nike's balance sheet, income statement and statement of cash flows must be converted from a myriad of foreign currencies into USD. What type of Foreign Currency Exposure is this? Group of answer choices Foreign Currency Transactional Exposure Foreign Currency Translational Exposure