Currency exchange fluctuations are important for a business to understand because they can ____________________

Question

Quizplus · Accepted Answer

All the given options are correct. Currency exchange fluctuations can affect profitability in an international transaction by changing the value of payment received or given in a foreign currency. They can also affect the pricing of goods or services in a market where the company operates, which ultimately can have an impact on profits. Additionally, currency fluctuations can impact a company's competitive advantage by making their goods or services more/less affordable than those of competitors. Finally, if a company imports goods or services, currency fluctuations can lead to increased costs.

Currency Exchange Fluctuations Are Important for a Business to Understand