Which one of the following is the risk that a firm faces when it opens a facility in a foreign country, given that the exchange rate between the firm's home country and this foreign country fluctuates over time?

Question

Quizplus · Accepted Answer

Exchange rate risk refers to the risk that a company faces due to the fluctuation in exchange rates between its home currency and the foreign currency where it has established a facility. This can affect the company's profits, cash flows, and competitiveness. Therefore, option D is the correct answer. The other options are not directly related to the exchange rate fluctuation risk.

Which One of the Following Is the Risk That a Firm