Asked by Joseph Smith on May 18, 2024
Verified
Exchange rate risk is the possibility of a gain or loss in a business transaction from exchange rate movement aside from the business deal itself.
Exchange Rate
The value of one currency for the purpose of conversion to another. It indicates how much of one currency can be exchanged for another currency.
Risk
Risk refers to the potential of losing some or all of an investment due to various factors such as economic changes, market volatility, or company performance.
Business Transaction
An economic event or activity that changes a company's financial position or earnings, often involving exchanges of value.
- Acquire knowledge of the core concepts underlying currency value changes and hazards in international trading activities.
Verified Answer
AJ
Amitoj JosanMay 20, 2024
Final Answer :
True
Explanation :
Exchange rate risk refers to the potential for a business transaction to be impacted by fluctuations in exchange rates, resulting in either a gain or loss in addition to the primary transaction itself.
Learning Objectives
- Acquire knowledge of the core concepts underlying currency value changes and hazards in international trading activities.