Foreign Exchange Risk Is Best Described as The

question 8

Multiple Choice

Foreign exchange risk is best described as the:

• A) variability in the current account balance of the balance of payments.
• B) cost of one currency in terms of another.
• C) risk that the price of one currency relative to another currency will change.
• D) variability of domestic and international interest rates.

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Definitions:

Future Date

A specified date in the future at which an event is scheduled to occur or a deadline is to be met.

Quantity

The amount or number of a material or immaterial entity that is accessible or demanded.

Price

The amount of money expected, required, or given in payment for something.

Interest Rate Swap

A financial derivative that involves the exchange of interest rate cash flows between two parties based on a specified principal amount.