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What Is Meant by Carry Trade? Why Is It Risky

question 84

Essay

What is meant by carry trade? Why is it risky? Explain with an example.


Definitions:

Exports

Products or services traded or sold from one nation to another.

Imports

Purchased goods or services brought into one country from another.

Financial Account

A component of the balance of payments that records transactions of financial assets between a country and the rest of the world.

Current Account Balance

The sum of a country's net income from foreign trade, net current transfers, and net income, often indicating the country's economic health.

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