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Risks in international markets

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What are different risks that investors face when investing in international markets? How can investors minimize or eliminate these risks?

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The different risks facing an investor who is investing in international markets are:

1. Exchange rate risk - The investments in international markets are denominated in the local currency of the country and so when the investments are converted to US dollars, this would be done at the prevailing exchange rate. Thus the investor takes on added foreign exchange risk when investing in international markets

2. Liquidity - ...

Solution Summary

This solution details the risks of international investing and explains some of the strategies for minimizing these risks.