Exchange Rate Risk & Forms of Exposure


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Eva is worried that the exchange rates will cause her company to lose money if she exchanges it tomorrow or the next day. Which form of exposure is she worried about?

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1. Geordie's company will be doing business in a country for many years in the future. To help mitigate the day-to-day fluctuations in exchange rates, he wants to lock in a _____ exchange rate.

2. Mirza is a CEO whose company does business overseas. He worries about large economic events that could happen in the future, and how they might cause his company to lose money. Which type of exposure is he worried about?

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About This Quiz & Worksheet

Businesses need to pay particular attention to the exchange rate. To see what risks are associated with this rate and the different forms of exposure, use the quiz and worksheet.

Quiz & Worksheet Goals

Using these materials helps you check your knowledge of:

  • Why falling stock prices occur
  • A way to mitigate the day-to-day fluctuations in exchange rates
  • Types of exposure

Skills Practiced

If you use the quiz and worksheet, which are mobile-friendly, you can practice the following skills:

  • Reading comprehension - ensure that you draw the most important information from the lesson on exchange rate risks and exposure types
  • Information recall - access the knowledge you have gained about why falling stock prices happen
  • Knowledge application - use your knowledge to answer questions about the different types of exposure

Additional Learning

See what more you can learn about these financial topics by using the lesson named Exchange Rate Risk & Forms of Exposure. You can use this lesson to analyze more topics, such as:

  • The meaning of exchange rate risk
  • How exchange rates change
  • Characteristics of the different types of exposure