__________ is a measure of sensitivity of future cash flows and profits of a bank to unanticipated…
Operating exposure measures the effect of unexpected exchange-rate movements on future operating cash flows and profitability. Translation exposure concerns conversion of…
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__________ is a measure of sensitivity of future cash flows and profits of a bank to unanticipated exchange rate changes.
Answer and explanation
Correct answer C
Operating exposure measures the effect of unexpected exchange-rate movements on future operating cash flows and profitability. Translation exposure concerns conversion of financial statements, while transaction exposure concerns amounts arising from particular foreign-currency transactions.
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Maharashtra and Goa SET (MH SET)