Foreign exchange risk is the risk that arises from the danger that a host government might take actions that are harmful to foreign investors or from the possibility that political turmoil in a country might endanger investment made in that country by foreign nationals.

Question

Quizplus · Accepted Answer

Foreign exchange risk refers to the potential for financial loss due to fluctuations in currency exchange rates, not political actions or turmoil. The latter is known as political risk.

Foreign Exchange Risk Is the Risk That Arises from the Danger