In some cases, exchange rate risk could be shifted to buyers if the buyer agrees to pay using the exporter's currency. However, there may not be a choice if the trade conventions are ____.
A) reciprocal
B) non-standard
C) differentiated
D) undifferentiated
E) standard

Question

Quizplus · Accepted Answer

When trade conventions are standard, it often means that there are established norms and practices regarding the currency in which transactions are conducted. In such scenarios, the exporter may not have the flexibility to shift exchange rate risk to the buyer by insisting on payment in their own currency, as the standard practice might dictate the use of a specific currency (often a major global currency like the USD or Euro) for international transactions.

In Some Cases, Exchange Rate Risk Could Be Shifted to Buyers