Asked by

Kiera Conner
on Oct 07, 2024

verifed

Verified

When considering the risk of a foreign investment,a higher risk might arise from exchange rate risk and political risk while lower risk might result from international diversification.

Exchange Rate Risk

Exchange rate risk, or currency risk, refers to the potential for loss due to fluctuations in the foreign exchange rate between two currencies.

Political Risk

The risk of losing money due to changes in a country's political landscape or government policies that negatively affect investments.

International Diversification

The strategy of spreading investment risk by purchasing assets in various countries, aiming to reduce overall investment risk.

  • Appraise the monetary dangers connected with global commercial operations, including risks from currency fluctuations and political uncertainties.
verifed

Verified Answer

JC
Julia CrawfordOct 10, 2024
Final Answer:
Get Full Answer