If a U.S. firm plans to frequently purchase goods from Hong Kong over the next several years, it does not have to worry about exchange rate risk.

Question

Quizplus · Accepted Answer

The U.S. firm does have to worry about exchange rate risk because there may be fluctuations in the exchange rate between the U.S. dollar and Hong Kong dollar over the next several years. This could affect the cost of the goods purchased from Hong Kong.

If a US Firm Plans to Frequently Purchase Goods from Hong Kong