QUESTION 15 A firm's operating exposure is O defined as the extent to which the firm's operating cash flows would be affected by the random changes in exchange rates. determined by the structure of the markets in which the firm sources its inputs, such as labor and materials, and sells its products. all of the options determined by the firm's ability to mitigate the effect of exchange rate changes by adjusting its markets, product mix, and sourcing QUESTION 16 Firms managing operating exposure in order to Stabilize cash flows in the face of fluctuating exchange rates. Increase the variability of cash flows in the face of fluctuating exchange rates. Stabilize cash flows in the face of fluctuating exchange rates, and increase the variability of cash flows in the face of fluctuating exchange rates. Selecting low cost production sites