The possibility of experiencing a drop in revenue or an increase in cost in an international transaction due to a change in foreign exchange rates is called

A) foreign exchange risk.
B) political risk.
C) translation exposure.
D) hedging risk.

Foreign Exchange Risk

The risk of losing money due to unfavorable changes in exchange rates affecting investments or transactions in foreign currencies.

Translation Exposure

The risk faced by multinational companies that financial statements in foreign currencies may fluctuate due to changes in exchange rates.

Hedging Risk

Hedging risk is a strategy used to reduce or eliminate the risk of loss from fluctuations in the prices of assets, currencies, or commodities, often through derivatives like options or futures.