Compute the degree of transaction exposure

Reference no: EM131794133

Question: A large MNC, has commissioned you to assess its transaction exposure. Its projected cash flows are as follows for the next year:

Currency	Total Inflow	Total Outflow	Current Exchange Rate in U.S. Dollars
Singapore dollar (SGP)	SGP50,000,000	SGP40,000,000	$.75
British pound (£)	£3,000,000	£2,000,000	$1.50

Assume that the movements in the Singapore dollar and the pound are highly correlated. Provide your assessment as to your firm's degree of transaction exposure (as to whether the exposure is high or low). Substantiate your answer.

Reference no: EM131794133

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