Which of the Following Statements Are Correct

Which of the following statements are correct?
I.The usage of forward rates increases the short-run exposure to exchange rate risk.
II.Accounting translation gains and losses are recorded in the equity section of the balance sheet.
III.The long-run exchange rate risk faced by an international firm can be reduced if a firm borrows money in the foreign country where the firm has operations.
IV.Unexpected changes in economic conditions are classified as short-run exposure to exchange rate risk.

A) I and III only
B) II and III only
C) I, II, and III only
D) II, III, and IV only
E) I, III, and IV only

Correct Answer:

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