What kind of currency risk is faced by both importers and exporters in international transactions in goods?

Question

Quizplus · Accepted Answer

Both importers and exporters face transaction risk, which is the risk of unfavorable exchange rate movements between the time a transaction is agreed upon and the time it is completed. This can result in either the importer paying more for the goods in their domestic currency, or the exporter receiving less in their domestic currency. Translation risk is a risk faced by companies that have foreign subsidiaries and is not directly related to international transactions in goods. Interest rate risk and investment risk are also not directly related to currency risk in international transactions in goods.

What Kind of Currency Risk Is Faced by Both Importers