GK
BUSINESS MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a risk related to the influence of a defect in the documentation on cash flow or dept service
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a risk of politically motivated interference of a foreign government
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occurs when a country depends too greatly on imports from one single country or when a country depends too greatly on exporting a very large number of exports to one single country
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a risk associated with the sale and accompanying transactions between two foreign markets
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a risk in which the exchange rates of either of the two countries will fluctuate
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Detailed explanation-1: -Foreign exchange risk occurs when the value of an investment fluctuates due to changes in a currency’s exchange rate. Foreign exchange risk is also known as FX risk, currency risk, and exchange-rate risk.
Detailed explanation-2: -Speculative risk refers to price uncertainty and the potential for losses in investments. Assuming speculative risk is usually a choice and not the result of uncontrollable circumstances. Pure risk, in contrast, is the potential for losses where there is no viable opportunity for any gain.
Detailed explanation-3: -Financial risk relates to how a company uses its financial leverage and manages its debt load.
Detailed explanation-4: -speculative risk. Whereas pure risk is beyond human control and can only result in a loss if it occurs, speculative risk is risk that is taken on voluntarily and can result in either a profit or loss.