Fluctuating currency values contribute to
A)transaction risk.
B)parallel imports.
C)Both a and b
D)None of the above.

Question

Quizplus · Accepted Answer

Fluctuating currency values can lead to both transaction risk and parallel imports. Transaction risk refers to the risk of financial loss due to exchange rate fluctuations during the course of a transaction. Parallel imports occur when goods that are sold in one country for a lower price are imported into another country where they are sold for a higher price, taking advantage of currency exchange rate differences. Therefore, both options A and B are correct answers.

Fluctuating Currency Values Contribute to