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The CEO of FINANCE CORP has asked you to assess the company's transaction exposure.it projected cash flows are as follows for the next year. EURO

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The CEO of FINANCE CORP has asked you to assess the company's transaction exposure.it projected cash flows are as follows for the next year. EURO inflows equal EUR 5.000.000 while outflows equal EUR 3,000,000. British pound inflows equal 1,000,000 while out flows equal 3,000,000. The spot rate of the EURO is 120 ALL, while the spot rate of the pound is 125 ALL Assume that the movements in the EURO and the British pound are highly negatively correlated Provide your assessment as to FINANCE CORP.'s degree of transaction exposure (as to whether the exposure is high or low). Substantiate your answer to receive credit

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