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Forex Trading What is the definition of Transaction Exposure?
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Question by: catherine - 07 Jun 2012, 05:06:11
What is the definition of Transaction Exposure?
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Answers (3)
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Answer by: mike - 07 Jun 2012, 10:08:00

This is the risk, often faced by companies involved in international trade, that currency exchange rates will change after the companies have already entered into financial obligations. Such exposure to fluctuating exchange rates can lead to major losses for firms. Often, when a company identifies such exposure to changing exchange rates, it will choose to implement a hedging strategy, using forward rates to lock in an exchange rate and thus eliminate the exposure to the risk.

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Answer by: Henry - 30 Apr 2015, 04:28:57

The risk that currency exchange rates will change after the companies have already entered into financial obligations.

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Answer by: Samanthar - 07 May 2015, 03:17:32

The risk faced by companies involved in international trade.

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