New SIDBI Grade A New Batch Starts on Nov 18

    Register

    Question

    When an enterprise has an unhedged receivable or payable denominated in a foreign currency and settlement of the obligation hasnotyet taken place that firm is said to have:

    A Transaction exposure Correct Answer Incorrect Answer
    B Accounting exposure Correct Answer Incorrect Answer
    C Infinite exposure Correct Answer Incorrect Answer
    D Operating exposure Correct Answer Incorrect Answer

    Solution

    Unhedged payables are the instruments which are not safe from exchange rate fluctuations. Transaction exposure is the risk of loss from a change in exchange rates during the course of a business transaction.

    Practice Next