INTRODUCTION TO ENTREPRENEURSHIP
ENTREPRENEURIAL PROCESS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Financial risks are risks faced by the business in terms of handling its finances, such as defaulting on loans, debt load, or delay in delivery of goods. Other risks include external events and activities, such as natural disasters or disease breakouts leading to employee health issues.
Detailed explanation-2: -At an exchange rate of 1 USD = 0.83 GBP, the company has to pay £83, 000 for the purchase of goods. If the exchange rate is more favourable, for example 1 USD = 0.78 GBP, the company only has to pay £78, 000.
Detailed explanation-3: -Foreign exchange risk is also known as exchange rate risk or currency risk. This risk arises from unanticipated changes in the exchange rate between two currencies. Multinational companies, export import businesses, and investors making foreign investments face exchange rate risks.