Translation risk and transaction risk are two types of foreign exchange risks that multinational corporations often face. Translation risk arises when a company's financial statements, which are in a foreign currency, are converted back into the parent company's currency. This type of risk does not directly affect the cash flows of a company, but it can impact the reported earnings and equity. On the other hand, transaction risk is associated with future cash flows that might change due to changes in exchange rates. This type of risk directly affects the cash flows of a company.

Choice B is incorrect. Transaction risk does affect the cash flows of a company. It arises from the effect of unexpected currency fluctuations on a company's future cash transactions, and can have significant impacts on the profitability and overall financial position of a company.

Choice C is incorrect. While it's true that translation risk can be hedged using various financial instruments, outright forward transactions and swaps are not exclusively used for this purpose. Other hedging strategies such as money market hedges or futures contracts may also be employed depending on the specific circumstances and needs of the corporation.

Choice D is incorrect. Although forward contracts can indeed be used to hedge transaction risk, this statement is too narrow in scope as it implies that only forward contracts are used for this purpose which isn't accurate. A variety of other derivative instruments like options or futures could also be utilized to hedge against transaction risk.