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Protecting Against Foreign Exchange Risk

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What is meant by foreign exchange risk? What specific problems does foreign exchange present in an organization? How could an organization needing Euros in six months protect itself from currency fluctuations?

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Solution Summary

Each question regarding foreign exchange risk is addressed in 2-3 sentences for 198 words total.

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Foreign exchange risk is the risk of an investment's value fluctuating due to a change in currency exchange rates. The risk occurs when a person who is invested in a foreign currency will have to close out his position at a loss because of a movement in exchange rates in an undesirable ...

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