Foreign exchange risk is that the value of assets and liabilities may change because of changes in the foreign exchange rate between two countries.

Question

Quizplus · Accepted Answer

This statement is true. Foreign exchange risk is the risk that arises from fluctuations in the value of one currency against another. Companies that have assets or liabilities denominated in a foreign currency face the risk that changes in exchange rates between the two currencies will affect their financial position.

Foreign Exchange Risk Is That the Value of Assets and Liabilities