Currency exchange risk cannot be managed because the fluctuations of currencies cannot be predicted.

Question

Quizplus · Accepted Answer

Currency exchange risk can be managed through hedging techniques such as forward contracts, options, and swaps. While it is true that the fluctuations of currencies cannot be predicted with certainty, these hedging strategies can still help mitigate the potential impact of such fluctuations on investments.

Currency Exchange Risk Cannot Be Managed Because the Fluctuations of Currencies