Exchange rate risk is the risk that the cash flows from a foreign project will be worth less than those same cash flows denominated in the parent company's home currency.

Question

Quizplus · Accepted Answer

Exchange rate risk refers to the possibility that fluctuations in exchange rates can reduce the value of cash flows from a foreign project when they are converted to the parent company's home currency. Therefore, the statement is true.

Exchange Rate Risk Is the Risk That the Cash Flows