Profits made by Canadian investors in Russia, become negative when repatriated to Canada. This is an example of ________.

Question

Quizplus · Accepted Answer

This is an example of currency risk, which occurs when the value of investments changes due to changes in currency exchange rates. When Canadian investors repatriate their profits from Russia to Canada, if the Russian currency has depreciated against the Canadian dollar, the value of the profits in Canadian dollars will be less, leading to losses.

Profits Made by Canadian Investors in Russia, Become Negative When