What is the primary difference between transaction exposure and accounting exposure?
A. Transaction exposure results from changes in currency exchange rates, whereas accounting exposure is the result of changes in accounting method.
B. Transaction exposure results in changes in cash flow, whereas accounting exposure does not necessarily result in changes in cash flow.
C. Transaction exposure must be hedged, but accounting exposure does not need to be hedged.
D. Transaction exposure affects only monetary assets and liabilities, whereas accounting exposure affects all assets and liabilities.
Answer:B
What is the primary difference between transaction exposure and accounting exposure?
A. Transaction exposure results from changes in currency exchange rates, whereas accounting exposure is the result of changes in accounting method. B. Transaction exposure results in changes in cash flow, whereas accounting exposure does not necessarily result in changes in cash flow. C. Transaction exposure must be hedged, but accounting exposure does not need to be hedged. D. Transaction exposure affects only monetary assets and liabilities, whereas accounting exposure affects all assets and liabilities.