1. Factors that affect a firm's translation exposure. What factors affect a firm's degree of translation exposure? Explain how each factor influences translation exposure.
2. Translation exposure. Consider a period in which the US dollar weakens against the euro. How will this affect the reported earnings of a European-based MNC with US subsidiaries? Consider a period in which the US dollar strengthens against most foreign currencies. How will this affect the reported earnings of a European-based MNC with subsidiaries all over the world?