Which of the following is the correct definition of Translation exposure?
1
It involves gain/loss emerging out of the different sorts of exchange that require settlement in a foreign currency.
2
It results from the need to translate foreign currency assets/liabilities into local currency at the time of finalising accounts
3
It implies the change in the value of a company that accompanies an unanticipated change in the exchange rates.
4
It has an impact on firm's future operating revenue, cost and cash flows.