10 - 10 Student 1 Translation exposure refers to A...

10
Student: ___________________________________________________________________________
1. Translation exposure refers to:
A. accounting exposure
B. the effect that an unanticipated change in exchange rates will have on the consolidated financial reports
of an MNC
C
.
the change in the value of a foreign subsidiaries assets and liabilities denominated in a foreign currency,
as a result of exchange rate change fluctuations, when viewed from the perspective of the parent firm
D. all of the above
2. The recognized methods for consolidating the financial reports of an MNC are:
3. How many methods of foreign currency translation have been used in recent years? (U.S. GAAP.)
4. Translation exposure, also frequently called accounting exposure, refers to the effect that an unanticipated
change in exchange rates will have on the
5. When exchange rates change, the value of a foreign subsidiary's assets and liabilities denominated in a
foreign currency change
A. When they are viewed from the perspective of the subsidiary firm.
B. When they are viewed from the perspective of the parent firm.
C
.
But this is only of material concern if the parent firm is liquidating the subsidiary in a bankruptcy and is
forced to realize the value of the assets and liabilities at the current exchange rate.
D. None of the above
6. The sensitivity of "realized" domestic currency values of the firm's contractual cash flows denominated in
foreign currency to unexpected changes in the exchange rate is:

7. The management of translation exposure is best described as