7-39 Foreign exchange risk is that the value of assets and liabilities may change because of changes in the level of interest rates.

Question

Quizplus · Accepted Answer

Foreign exchange risk refers to the risk of changes in exchange rates that can lead to a gain or loss in the value of assets or liabilities denominated in foreign currencies. Interest rate changes may affect exchange rates, but they do not directly cause foreign exchange risk.

7-39 Foreign Exchange Risk Is That the Value of Assets