2. Which of the following describes translation risk?A The risk of companies is unable to raise foreign currency for international transactions.B The risk of adverse currency movement before a transaction can be completed.C The risk that adverse currency movements, while not actually realized in cash value, will strongly affect the company's accounting performance and the net asset value.D The risk of adverse movements in foreign exchange rates affecting the ability of a country's commercial sector to compete.

Translation risk is Foreign Exchange Balance Sheet Risk.

Answered: Which of the following describes…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter29: Exchange Rates And International Capital Flows

Section: Chapter Questions

Problem 6SCQ: A booming economy can attract financial capital inflows, which promote further growth. However,...

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2. Which of the following describes translation risk?

A		The risk of companies is unable to raise foreign currency for international transactions.
B		The risk of adverse currency movement before a transaction can be completed.
C		The risk that adverse currency movements, while not actually realized in cash value, will strongly affect the company's accounting performance and the net asset value.
D		The risk of adverse movements in foreign exchange rates affecting the ability of a country's commercial sector to compete.

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