J&L Co. is a U.S.-based MNC with net cash inflows of euros and net cash inflows of British pounds. These two currencies are highly correlated in their movements against the dollar. Magent Co. is a U.S.-based MNC that has the same level of net cash flows in these currencies as J&L Co. except that its euros represent net cash outflows. Which firm has a higher exposure to exchange rate risk?

Group of answer choices

the firms have about the same level of exposure

J&L Co.

Magent Co.

neither firm has any exposure