Which of the following is NOT an example of a form of political risk that might be avoided or reduced by foreign exchange risk management?
A) expropriation of assets
B) destruction of raw materials through natural disaster
C) war
D) unfavorable legal changes

Question

Quizplus · Accepted Answer

Foreign exchange risk management is concerned with mitigating risks related to fluctuations in currency exchange rates. Destruction of raw materials through natural disaster is not related to currency exchange rates and therefore cannot be avoided or reduced through foreign exchange risk management. However, expropriation of assets, war, and unfavorable legal changes all have the potential to impact currency exchange rates and thus can be partially mitigated through foreign exchange risk management.

Which of the Following Is NOT an Example of a Form