_____ refers to the adverse consequences of unpredictable changes in exchange rates.

Question

Quizplus · Accepted Answer

Foreign exchange risk refers to the potential financial losses that arise from unpredictable changes in exchange rates. This risk can affect companies that engage in international trade and have exposure to multiple currencies. It can lead to reduced profits, increased costs, and volatility in financial statements. To mitigate this risk, companies can use hedging strategies such as forward contracts or currency options.

_____ Refers to the Adverse Consequences of Unpredictable Changes in Exchange