Which one of the following statements is correct?

Multiple Choice

A firms long-run exchange rate risk can be reduced by borrowing money in the foreign country where it has operations.

Foreign assets are recorded on the parent firms balance sheet based on the exchange rate at the time each asset is acquired.

FASB requires that all translation gains and losses be recorded annually on the firms income statement.

The usage of forward rates primarily addresses the long-run exposure to exchange rate risk.

Unexpected changes in economic conditions are classified as short-run exposure to exchange rate risk.