Your company is considering expanding into the international markets. The Board of Directors has asked you create a 5 page report that defines and explains the various types of exposure the company could experience and the types of financial contracts and operational techniques that will be used to deal with these exposures.
Of particular interest to the Board are the relationships among different types of exposures, financial contracts, and operational techniques. The Board has asked you to address the following issues in your report:
- Define the different types of exposure the firm might encounter, including transaction exposure, economic exposure, and translation exposure and explain why they occur Use examples to support your response..
- Explain the relationship between the three types of exposure. Provide examples to illustrate how and why it occurs.
- Describe the different types of financial contracts and how they are associated with each type of exposure.
- Explain the operational techniques that are available for each type of exposure.
- Make sure to include at least three outside resources to support the claims you present in your report.