Question : Which of the following is not a type of foreign exchange rate risk?
Option 1: Transaction risk
Option 2: Translation risk
Option 3: Political risk
Option 4: Credit risk
Answer (1)
20th Jan, 2024
Correct Answer: Credit risk
Solution : The correct answer is (d) Credit risk
Credit risk is not a type of foreign exchange rate risk. It is a risk associated with the potential default or non-payment by a borrower on their financial obligations. Credit risk is primarily related to the creditworthiness and financial stability of the counterparty, rather than fluctuations in foreign exchange rates.
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