XYZ Company maintains subsidiaries in both Europe and Asia, and they generate financial statements in their

respective local currencies. The U$.$S$.$ parent company must consolidate these financial statements into its reporting

currency, the U$.$S$.$ dollar $($USD$),$ for its annual reports. Which type of foreign exchange risk is XYZ Company exposed

to$?$

A$.$ Economic risk

B$.$ Transfer risk

C$.$ Transaction risk

D$.$ Translation risk