Which of the Following Is Not a Source of Foreign

question 41

Multiple Choice

Which of the following is not a source of foreign exchange risk?

• A)Trading foreign currencies.
• B)Making domestic-currency loans to foreign corporations.
• C)Buying foreign-issued securities.
• D)Issuing foreign currency-denominated debt.

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Definitions:

Inflation

A general increase in prices and fall in the purchasing value of money over time.

Taxes

Mandatory financial charges or levies imposed by governments on individuals or entities to fund government spending and various public expenditures.

Capital Allocation Line

A graph line that represents all possible combinations of risk-free and risky assets for an investor.

Mean Standard Deviation Graph

A graphical representation that shows the variability of a dataset around its mean value, often used in statistics.