Which of these is defined as the possibility that the spot currency exchange rate will change and reduce the value of foreign assets and cash flows?

Question

Quizplus · Accepted Answer

Exchange rate risk refers to the potential financial loss that can occur when the exchange rate between two currencies changes, affecting the value of foreign assets and cash flows. The spot rate is simply the current exchange rate at the time of the transaction and does not encompass future changes in the exchange rate. Value rate risk is not a commonly used term in finance, and foreign rate risk does not specifically refer to changes in the exchange rate.

Which of These Is Defined as the Possibility That the Spot