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Adugnaw Bamlaku
on Oct 19, 2024

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The possibility of experiencing a drop in revenue or an increase in cost in an international transaction due to a change in foreign exchange rates is called

A) foreign exchange risk.
B) political risk.
C) translation exposure.
D) hedging risk.

Foreign Exchange Risk

The potential for financial loss due to fluctuations in exchange rates affecting foreign-denominated investments or transactions.

Translation Exposure

The risk that a company's financial statements can be affected by changes in exchange rates when foreign operations are consolidated.

Hedging Risk

The process of making an investment or entering into a financial transaction in order to reduce the risk of adverse price movements in an asset.

  • Recognize and comprehend the various risks involved in international investment, such as political and currency exchange risks.
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madeline trussellOct 25, 2024
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