Three basic types of risk associated with international cash flows are 1) business and financial risks,2) inflation and foreign exchange risks, and 3) political risks.

Question

Quizplus · Accepted Answer

This statement is true. Business and financial risks include factors such as economic instability, creditworthiness of customers, and the potential for default. Inflation and foreign exchange risks involve fluctuations in currency values and purchasing power, while political risks relate to changes in government policies, regulations, and instability in the host country. All of these risks can impact the success of international cash flows.

Three Basic Types of Risk Associated with International Cash Flows