transaction exposure

Transaction Exposure

In international trade, this is the potential risk that currency exchange rates will change after financial obligations are entered into.

Notes:

Basically, this is the exposure a company has due to constantly changing exchange rates.

See also: Exchange Rate, Transaction, Translation Exposure

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Transaction exposure

Risk to a firm with known future cash flows in a foreign currency, that arises from possible changes in the exchange rate. Related: Translation exposure.

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transaction exposure

The risk of loss caused by changes in currency exchange rates when a company's payables and receivables are denominated in a foreign currency. Derivatives are used to hedge against changes in currency exchange rates and reduce transaction exposure.