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# What factors affect a firm-'s degree of transaction exposure in a part.docx

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# What factors affect a firm-'s degree of transaction exposure in a part.docx

What factors affect a firm\'s degree of transaction exposure in a particular currency? For each factor, explain the desirable characteristics that would reduce transaction exposure.
Solution
Two factors are as below:
1. Variability in currency.
2. Correlation with currency.
Desirable characteristics are as below:
Variability in currency: Reducing transaction exposure could be possible if low level is wanted.
Correlation with currency: Reducing transaction exposure could be possible if low level is wanted for inflowing currency and high level is wanted for both inflowing and outflowing of exchanging currencies.
.

What factors affect a firm\'s degree of transaction exposure in a particular currency? For each factor, explain the desirable characteristics that would reduce transaction exposure.
Solution
Two factors are as below:
1. Variability in currency.
2. Correlation with currency.
Desirable characteristics are as below:
Variability in currency: Reducing transaction exposure could be possible if low level is wanted.
Correlation with currency: Reducing transaction exposure could be possible if low level is wanted for inflowing currency and high level is wanted for both inflowing and outflowing of exchanging currencies.
.

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### What factors affect a firm-'s degree of transaction exposure in a part.docx

1. 1. What factors affect a firm's degree of transaction exposure in a particular currency? For each factor, explain the desirable characteristics that would reduce transaction exposure. Solution Two factors are as below: 1. Variability in currency. 2. Correlation with currency. Desirable characteristics are as below: Variability in currency: Reducing transaction exposure could be possible if low level is wanted. Correlation with currency: Reducing transaction exposure could be possible if low level is wanted for inflowing currency and high level is wanted for both inflowing and outflowing of exchanging currencies.