Foreign exchange risk is best described as the:
A) variability in the current account balance of the balance of payments.
B) cost of one currency in terms of another.
C) risk that the price of one currency relative to another currency will change.
D) variability of domestic and international interest rates.

Question

Quizplus · Accepted Answer

Foreign exchange risk refers to the risk that the value or price of one currency relative to another currency will change, leading to potential financial losses in international transactions. Options A, B, and D do not accurately describe foreign exchange risk.

Foreign Exchange Risk Is Best Described as The