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Question
If a British company exports to a German company and the export is denominated in euros, which of the following is true?
A) The German company would experience a loss if the euro strengthens against the pound.
B) The British company would experience a gain if the euro strengthens against the pound.
C) The British company would not experience a gain or a loss because the sale is denominated in euros, not pounds.
D) Exports result in translation exposures but not transaction exposures.
Answer
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