Sources of risk include
1. fluctuating exchange rates
2. a firm's financing decisions
3. higher interest rates
4. loss of purchasing power
A)1 and 2
B)2 and 3
C)2 and 4
D)all four

Question

Quizplus · Accepted Answer

All four options are sources of risk. Fluctuating exchange rates can affect the value of foreign investments, a firm's financing decisions can impact its leverage and financial stability, higher interest rates can increase borrowing costs, and loss of purchasing power due to inflation can erode real returns.

Sources of Risk Include