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Question : What is the term used to describe the risk that changes in exchange rates will affect the value of future cash flows associated with an investment or business operation?

Option 1: Currency risk
 

Option 2: Liquidity risk
  

Option 3: Market risk

 

Option 4: Systemic risk


Team Careers360 15th Jan, 2024
Answer (1)
Team Careers360 19th Jan, 2024

Correct Answer: Currency risk


Solution : The correct answer is a)  Currency risk

Currency risk refers to the potential for fluctuations in exchange rates to impact the profitability or value of investments, trade transactions, or financial obligations denominated in foreign currencies. It arises from the uncertainty and volatility in exchange rates and can have significant implications for businesses and investors engaged in international activities.

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