The risk that arises from the fact that MNCs have to report foreign revenues and costs in their domestic financial statements is called

Question

Quizplus · Accepted Answer

Translation risk arises from the fact that MNCs have to translate foreign earnings and expenses into their domestic currency for financial reporting purposes, which exposes them to fluctuations in exchange rates. Transactions risk refers to the risk of loss from currency fluctuations during transactions, economic risk refers to the risk of loss from external economic factors, and political risk refers to the risk of loss from political instability or changes in government policies.

The Risk That Arises from the Fact That MNCs Have