The objective of a prudent financial manager is to eliminate all foreign exchange risk.

Question

Quizplus · Accepted Answer

It is not always possible or desirable for a financial manager to eliminate all foreign exchange risk. Managing and hedging foreign exchange risk is a complex process that involves balancing the costs and benefits of various strategies. Depending on the circumstances, it may be more appropriate to manage, reduce, or even accept some degree of foreign exchange risk.

The Objective of a Prudent Financial Manager Is to Eliminate