Q 13. Fluctuations in exchange rates are considered to be a lan
cause of Business Risks.
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What is Foreign Exchange Risk?
Foreign exchange risk refers to the losses that an international financial transaction may incur due to currency fluctuations. Also known as currency risk, FX risk and exchange-rate risk, it describes the possibility that an investment’s value may decrease due to changes in the relative value of the involved currencies. Investors may experience jurisdiction risk in the form of foreign exchange risk.
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