Asked by Laura Resendez on Jun 22, 2024
Verified
Currency risk is based on what assumption?
A) Firms that do not continuously innovate will lose market share.
B) Values of foreign currencies continually rise and fall in most countries.
C) Changing product lines by reacting to every current trend may alienate the customer base.
D) The value of one dollar today is greater than the value of one dollar to be received one year from now.
E) The U.S. stock market fluctuates daily.
Currency Risk
The potential for financial loss due to fluctuations in foreign exchange rates affecting investments or business operations involving different currencies.
Foreign Currencies
Currencies used in countries other than one's own, involved in international trade and finance transactions.
- Understand the concept of currency risk and its implications for international business operations.
Verified Answer
KW
Kosisochi William UdozorhJun 23, 2024
Final Answer :
B
Explanation :
Currency risk is based on the assumption that values of foreign currencies continually rise and fall in most countries. This can create uncertainty and potential losses for companies engaged in international trade or investment.
Learning Objectives
- Understand the concept of currency risk and its implications for international business operations.