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.
E)Making foreign currency loans.

Question

Quizplus · Accepted Answer

Making domestic-currency loans to foreign corporations does not involve foreign exchange risk since the loans are issued in the domestic currency and not the foreign currency. The other options all involve transactions or investments in foreign currencies or foreign-denominated debt, which can be subject to fluctuations in exchange rates and therefore carry foreign exchange risk.

Which of the Following Is NOT a Source of Foreign