If the Canadian Dollar Gets Weaker Relative to the Chinese

question 21

Multiple Choice

If the Canadian dollar gets weaker relative to the Chinese yuan, what might happen?

• A) Canadian trade surplus will fall.
• B) Canadian trade deficit will fall.
• C) Chinese trade surplus will rise.
• D) Chinese trade deficit will fall.

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Definitions:

Exchange Rate Risk

Exchange rate risk, or currency risk, refers to the potential for loss due to fluctuations in the foreign exchange rate between two currencies.

Political Risk

The risk of losing money due to changes in a country's political landscape or government policies that negatively affect investments.

International Diversification

The strategy of spreading investment risk by purchasing assets in various countries, aiming to reduce overall investment risk.

International Financial Management

The discipline concerned with managing financial resources in a global market, including investment, financing strategies, and risk management across borders.