Economic exposure
How economic exposure can be defined in order to exchange the risk?
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Economic exposure is defined as the possibility that the firm’s cash flows and therefore its market value can be affected through the unexpected exchange rate changes.
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General Motors exports the cars to Spain however the strong dollar against the peseta, hurts the sales of GM cars in the Spain. In Spanish market, GM faces the competition from the French and Italian car makers, like Renault and Fiat, whose currencies stays stable wit
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