What Is "Asset Exposure" to Foreign Exchange Risk

question 28

Multiple Choice

What is "asset exposure" to foreign exchange risk?

• A) The possibility that an asset denominated in domestic currency will decline in value because of changes in the foreign exchange rate
• B) The possibility that an asset denominated in a foreign currency will change in value because of a change in the foreign exchange rate
• C) The loss resulting from an import purchase when a foreign currency appreciates
• D) The loss resulting from an import purchase when a foreign currency depreciates