Metairie Corp., a U.S. firm, has a French subsidiary that produces sparkling water and exports to various European countries. All of the countries where it sells its sparking water use the euro as their currency, which is the same as the currency used in France. Is Metairie Corp. exposed to exchange rate risk?

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in t…