00:01
So for this question, let's go over what economic exposure is.
00:10
So economic exposure is a type of foreign exchange exposure.
00:28
And this is caused by fluctuating exchange rates between currencies.
00:51
And these currency fluctuations are unexpected.
00:55
It can have impact on a company's market value because it has far -reaching effects and is long -term by nature.
01:06
So economic exposure increases as foreign exchange volatility or volatility increases.
01:33
So when a currency's price fluctuates wildly, so it moves up and down sporadically, it's going to have a high volatility.
01:50
So basically, if exchange rate between two currencies, change, change.
02:07
Wildly, then foreign exchange volatility goes up.
02:36
So, unanticipated rate fluctuations and changes affect a company's cash flows...