The possibility of experiencing a drop in revenue or an increase in cost in an international transaction due to a change in foreign exchange rates is called
A) foreign exchange risk.
B) political risk.
C) translation exposure.
D) hedging risk.

Question

Quizplus · Accepted Answer

The possibility of experiencing a drop in revenue or an increase in cost in an international transaction due to a change in foreign exchange rates is called foreign exchange risk. This risk is associated with the uncertainty of exchange rate fluctuations, which can lead to unpredictable gains or losses in a business transaction.

The Possibility of Experiencing a Drop in Revenue or an Increase