Your employer, a large MNC, has asked you to assess its transaction exposure. Its projected cash flows are as follows for the next year:

Currency

Total Inflow

Total Outflow

Current Exchange Rate in U.S. Dollars

Danish krone (DK)

DK50,000,000

DK40,000,000

$.15

British pound ()

2,000,000

1,000,000

$1.50

Assume that the movements in the Danish krone and the pound are highly correlated. Provide your assessment as to your firms degree of transaction exposure (as to whether the exposure is high or low). Substantiate your answer.