The Risk Resulting from Possible Fluctuations in Currency Exchange Rates

question 49

Multiple Choice

The risk resulting from possible fluctuations in currency exchange rates is called

• A) hedging.
• B) transaction exposure.
• C) the direct quote.
• D) floating.
• E) None of the above

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Definitions:

Genetic Predispositions

Inclinations or susceptibilities to certain traits, behaviors, or diseases, inherited from one's parents through genes.

Instinct Theory

A theory proposing that certain behaviors are innate and due to evolutionary programming.

Behavior

The behavior or responses of a person or system when influenced by external or internal factors.

Incentive

A factor, often a reward or a form of motivation, that induces or influences a person to act or perform in a certain way.