Sort the exposure before choosing the response

Sort each situation by the kind of FX exposure it mainly represents. Focus on what objective is affected: cash flow, accounting translation, competitive economics, or none directly. Transaction exposure Translation exposure Economic exposure No direct FX exposure Signed EUR supplier invoice due in 45 days CAD customer receivable expected next month Foreign subsidiary financial statements converted to USD reporting Local-currency net assets remeasured for group reporting Home currency strengthens and export prices become less competitive Competitor with local sourcing gains margin when your import costs rise Employee reads a news story about yen volatility with no company cash flow A…

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