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The risk where the value of assets and liabilities changes due to exchange rate fluctuations is called __________?

Foreign exchange risk, also known as currency risk, occurs when the value of assets and liabilities fluctuates due to changes in currency exchange rates. This risk affects businesses and financial institutions engaged in international trade or holding foreign-denominated assets and... Read More

1 FINANCE MCQS

The risk where the value of assets and liabilities changes due to exchange rate fluctuations is called __________?

  • Economic rates
  • Foreign exchange risk
  • Selling rate
  • Buying rate
Correct Answer: B. Foreign exchange risk

Detailed Explanation

Foreign exchange risk, also known as currency risk, occurs when the value of assets and liabilities fluctuates due to changes in currency exchange rates. This risk affects businesses and financial institutions engaged in international trade or holding foreign-denominated assets and liabilities.

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