Correct option is d: transactional exposure
Transactional exposure arises from volatile changes in exchange rates.
Transaction exposure is the exposure which arises from the effect that is put by the exchange rate fluctuations on the company’s obligations to make and receive different payments denominated in foreign currency.
This type of exposure can be either short-term or it can be medium-term in nature.
Exchange rate risk refers to that risk by which a company’s operations and profitability may be affected by the changes occuring in the exchange rates between currencies.
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