Which of the Following Describes the Difference Between Transaction Exposure

Multiple Choice

Which of the following describes the difference between transaction exposure and translation exposure?

A) Translation exposure derives from a company's foreign-currency-denominated cash flows, and transaction exposure derives from the foreign assets and liabilities being consolidated onto the parent company's financial statements.
B) Transaction exposure derives from a company's foreign-currency-denominated cash flows, and translation exposure derives from the foreign assets and liabilities being consolidated onto the parent company's financial statements.
C) Translation exposure derives from a company's forward exchange contracts, and transaction exposure derives from the foreign assets and liabilities being consolidated onto the parent company's financial statements.
D) Translation exposure derives from a company's foreign-currency-denominated cash flows, and transaction exposure derives from the company's forward exchange contracts.