Currency risk is risk associated with the fluctuation of currency values relative to another currency.

Question

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Currency risk is also known as exchange rate risk and refers to the risk of financial losses that can occur due to changes in the exchange rate between two currencies. For example, if an investor holds assets in one currency and the exchange rate of that currency decreases relative to another currency, the value of their assets will decrease in terms of the other currency. This can result in financial losses or reduced returns for the investor.

Currency Risk Is Risk Associated with the Fluctuation of Currency