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Political Risk
In international business, the chance that the value of a firm’s investment in a foreign country will be reduced by political actions of either the foreign government or terrorists.
Exchange Rate Risk
The risk that international trade dealings will earn less than expected because of movement in exchange rates.
Economic Risk
The possibility of loss caused by macroeconomic or market conditions, such as changes in interest rates or recessions.
Forward Rate
The agreed upon exchange rate for a currency transaction that will occur at a future date.
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