When a company invests in another country that uses a different currency it is exposed to the risk that its cash flows will be affected by changes in the exchange rate for currency. What is this called: A. transaction risk B. translation risk C. overseas risk D. political risk E. economic risk

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter10: Measuring Exposure To Exchange Rate Fluctuations
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The questions about Risks when investing in another country

When a company invests in another country that uses a different currency it
is exposed to the risk that its cash flows will be affected by changes in the
exchange rate for currency. What is this called:
A. transaction risk
B. translation risk
C. overseas risk
D. political risk
E. economic risk
Transcribed Image Text:When a company invests in another country that uses a different currency it is exposed to the risk that its cash flows will be affected by changes in the exchange rate for currency. What is this called: A. transaction risk B. translation risk C. overseas risk D. political risk E. economic risk
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