Question

Difference between foreign exchange risk and foreign exchange exposure

Answer 1

DIFFERENCE BETWEEN FOREIGN EXCHANGE EXPOSURE & EXCHANGE RISK  Foreign exchange risk is related to the variability of the domestic currency values of assets, liabilities or operating income due to unanticipated changes in exchange rates, whereas foreign exchange exposure is what is at risk

Answer 2

Foreign exchange risk and foreign exchange exposure

Explanation:

• A foreign exchange risk is an exchange rate risk and is a sort of financial risk that exists when the transaction is dominating a currency other than the home currency. And the risks arose due to the unfavorable exchange rates between these two currencies.  

• They can be various types like the economic risk, contingent risks, and transaction risks and translation risks all depend on the movements of the exchange rate.

• A foreign exchange exposure is a type of risk that a company takes when financing the transition in a foreign currency and can experiment the periods of high volatility and have adverse impacts on the profit margins and can cause great damages if the sustainable practice is not in place.

• In short, exposure is the degree to a company is affected by changes in exchange rates. And the exchange rate risk is values of one currency to another.

Learn more about the difference between foreign exchange risk and foreign exchange exposure.

• brainly.in/question/388804 answered by Bijalanubha123.