Exchange rate risk is easier to protect as compared to political risk.

Question

Quizplus · Accepted Answer

Exchange rate risk can be managed through various financial tools such as hedging, options, and forward contracts. On the other hand, political risk refers to the risk of a government taking actions that negatively affect businesses operating in their country, such as nationalization of assets or changes in policies. Political risk is more difficult to protect against as it involves unpredictable and uncontrollable events.

Exchange Rate Risk Is Easier to Protect as Compared to Political