You have invested $10,000 of your client's money in the exchange market of Spain. You have introduced your client's money to what?

Question

Quizplus · Accepted Answer

When investing a client's money in Spain or any other foreign market, you are introducing your client's money to exchange rate risk. Exchange rate risk, or currency risk, occurs when interest and dividend payment are denominated in a foreign currency and the value of the currency fluctuates relative to the value of the home currency. If the foreign currency increases against the home currency, each unit, or dollar, will be worth less; if a foreign currency decreases against the home currency, each unit will be worth more.

You Have Invested $10,000 of Your Client's Money in the Exchange