4 Views

Question : ________ risk refers to the potential for losses due to changes in exchange rates.

Option 1: Credit
 

Option 2: Market
 

Option 3: Operational

 

Option 4: Foreign exchange


Team Careers360 11th Jan, 2024
Answer (1)
Team Careers360 12th Jan, 2024

Correct Answer: Foreign exchange


Solution : The correct answer is (d) Foreign exchange risk.

Foreign exchange risk refers to the potential for losses that can occur due to fluctuations or changes in exchange rates. This risk is relevant to individuals, businesses, and financial institutions that engage in international transactions or hold assets or liabilities denominated in foreign currencies. Changes in exchange rates can impact the value of investments, the cost of imports and exports, and the profitability of international business operations. Managing foreign exchange risk often involves hedging strategies, such as using derivatives or forward contracts, to mitigate potential losses caused by currency fluctuations.

Related Questions

CLAT Current Affairs with GK ...
Apply
Stay updated with current affairs & check your preparation with the CLAT General Knowledge Mock Tests Ebook
CLAT English Language Mock Tests
Apply
Free Ebook - CLAT 2025 English Language questions with detailed solutions
ICFAI Business School-IBSAT 2024
Apply
9 IBS Campuses | Scholarships Worth Rs 10 CR
CLAT Legal Reasoning Mock Tests
Apply
Free Ebook - CLAT 2025 legal reasoning questions with detailed solutions
GIBS Business School Bangalor...
Apply
100% Placements with 220+ Companies
Great Lakes PGPM & PGDM 2025
Apply
Admissions Open | Globally Recognized by AACSB (US) & AMBA (UK) | 17.3 LPA Avg. CTC for PGPM 2024
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books