When European, Japanese or North American firms move assets out of the home market into countries with depreciating currencies, they are decreasing their economic exposure risk

Question

Quizplus · Accepted Answer

When firms move assets out of the home market into countries with depreciating currencies, they are increasing their economic exposure risk. This is because the value of their assets will decrease in terms of their home currency as the foreign currency depreciates.

When European, Japanese or North American Firms Move Assets Out