Match List I with List II:
| List I - Type of Exposure | List II - Description | ||
| (A) | Economic Exposure | (I) | Potential changes in all future cash flows of a firm that result from unanticipated changes in exchange rates. |
| (B) | Translation Exposure | (II) | It arises when items of financial statements that are stated in foreign currencies are restated in the home currency of an MNC. |
| (C) | Transaction Exposure | (III) | It arises when a firm's contract obligations are exposed to unanticipated changes in exchange rate. |
| (D) | Operating Exposure | (IV) | When a firm's real assets are exposed to unanticipated changes in exchange rates. |
Choose the correct answer from the options given below:
1
(A) - (III), (B) - (IV), (C) - (II), (D) - (I)
2
(A) - (I), (B) - (II), (C) - (III), (D) - (IV)
3
(A) - (IV), (B) - (III), (C) - (II), (D) - (I)
4
(A) - (I), (B) - (IV), (C) - (III), (D) - (II)