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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

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 () 1,000,000 3,000,000 $1.50 Assume that the movements in the Danish krone and the pound are highly positively correlated. Your firms degree of transaction exposure is _________ A. low B. high

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