Eiteman/Stonehill/Moffett • MultinationalBusinessFinance,TwelfthEditionChapter12 OperatingExposure  Chapter12OperatingExposure Questions12-1.ByAnyOtherName.Operatingexposurehasothernames.Whatarethey,andwhatdothewordsinthesenamessuggestaboutthenatureofoperatingexposure?Economicexposureemphasizesthattheexposureiscreatedbytheeconomicconsequencesofanunexpectedexchangeratechange.Economicconsequences,inturn,suggeststhattheimpactisduetotheresponseofexternalforcesintheeconomy,ratherthan,say,somethingdirectlyunderthecontrolofmanagement.Competitiveexposuresuggeststhattheconsequencesofanunexpectedexchangeratechangeareduetoashiftinthecompetitivepositionofafirm,vis-á-visitscompetitors.Strategicexposuresuggeststhatmattersoflong-rangecostchangesandpricesetting,neededtoanticipateoradjusttoanunexpectedchangeinexchangerates,aremattersofcorporatestrategy;i.e.,howthecompanypositionsitselfinanticipationofriskscausedbyexchangeratechanges.12-2.ExposureTypeComparison.Fromacashflowmeasurementperspective,whatisthemajordifferencebetweenlossesfromtransactionexposureandfromoperatingexposure?Bothexposuresdealwithchangesinexpectedcashflows.Transactionexposuredealswithchangesinnear-termcashflowsthathavealreadybeencontractedfor(suchasforeigncurrencyaccountsreceivable,accountspayable,andotherdebts).Operatingexposuredealswithchangesinlong-termcashflowsthathavenotbeencontractedforbutwouldbeexpectedinthenormalcourseoffuturebusiness.Onemightviewoperatingexposureas“anticipatedfuturetransactionsexposure,”althoughtheconceptisbroaderbecausetheimpactoftheexposuremightbethroughsalesvolumeoroperatingcostchanges.Givenaknownexchangeratechange,thecashflowimpactoftransactionexposurecanbemeasuredpreciselywhereasthecashflowimpactofoperatingexposureremainsaconjectureaboutthefuture.12-3.IntracompanyCashFlows.Whatarethedifferencesbetweenoperatingcashflowsandfinancialcashflowsfromparenttosubsidiaryorviceversa?Listseveralcashflowsinbothcategoriesandindicatewhythatflowtakesplace.Operatingcashflows.Thes