Exchange Rate Risk

question 103

Multiple Choice

Exchange rate risk

• A) arises from the fact that the spot exchange rate on a future date is a random variable.
• B) applies only to certain types of international businesses.
• C) has been phased out due to recent international legislation.
• D) is not a significant factor in foreign investment decisions.

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Definitions:

Fourteenth Amendment

An amendment to the U.S. Constitution, guaranteeing equal protection under the law.

Endogamy

The custom of marrying within one's social, cultural, or ethnic group.

Propinquity

The tendency for people to form friendships or relationships with those whom they encounter frequently, often due to physical or geographical proximity.

Endogamy

The practice of marrying within a specific social group, caste, or ethnic group, rejecting others on such a basis as being unsuitable for marriage or other close personal relationships.