See: Transaction Costs.
Transaction exposure is much more respectable than an exposure transaction. You'll have to go to a murkier part of the Internet to learn about that other one.
As to transaction exposure, it relates to international trade. The term describes the risk that unfavorable changes in currency exchange rates will impact a deal.
You sign a contract to buy curling equipment from Canada. You agree to buy 1,000 curling brooms for C$50 each. At the time, the Canadian dollar is trading at 1.25-to-1 against the U.S. dollar. The C$50,000 you are spending for the brooms equates to $40,000 in U.S. dollars. Your plan is to sell the brooms to the underground curling clubs that have been springing up all over inner cities in the U.S. You figure you can get $55,000 for them in U.S. dollars by selling them in America, giving you a profit of $15,000 in U.S. currency.
Then...the exchange rate shifts. The Candian dollar strengthens to 1.15-to-1 against the U.S. dollar. You still need to pay C$50,000 in Canadian currency to get the curling equipment. But now that C$50,000 equates to about $43,500 in U.S. dollars.
Your profit just dropped by about $3,500 due to the shift in currency rates. Transaction exposure.
Related or Semi-related Video
Finance: What is Counterparty Risk?9 Views
Finance a la shmoop what is counterparty risk?
alright here's you the party and here's the guy you're contracting with to sell [Woman and man stood side by side]
18 tons of bricks or buy a line of credit for your flower shop or sell a
futures contract with the right to buy oil at 80 bucks a barrel for the next [Person signs contract]
two years so you're the party and he's the counterparty and the yin and yang of
the party and here's the risk yeah well the counterparty risk is just
that the person you contracted with doesn't live up to their end of the
bargain you pay them good money you sign a good contract all lawyered up and [Stack of money and contract appears]
stuff and then they split like totally split disappeared sea men choose the
bottom of the ocean maybe they went to Bora Bora
maybe they got facial surgery in the Philippines you know they do that now [George Clooney in a surgical bed]
well when that happens you will probably feel like crying and you should its your
counterparty you can cry if you want to come on that was a good reference people [Man singing]