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
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
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc870ed34-0531-4948-a741-825b90907d82%2Fcaeb727e-0d35-427c-a714-c993f659e306%2Fdfcsgo.jpeg&w=3840&q=75)
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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