Hedging & Transaction Exposure

[Name of the Professor]

Hedging & Transaction Exposure

Factors Affecting Transaction Exposure & How to Reduce it

Transaction exposure for a country represents the net amount of transactions denoted in the foreign currency. Once the country enters into foreign country transactions it can enter into making potential gains and losses from these transactions. The most important factor that affects a firm's level of transaction exposure is the fluctuations that take place in the currency itself. If the transaction made by the firm in a particular country sees the currency of that country rising in comparison to the local currency, ...