What is “asset exposure” to foreign exchange risk?
A. the possibility that an asset denominated in U.S. dollars will decline in value because of changes in the foreign exchange rate
B. the possibility that an asset denominated in a foreign currency will change in value because of a change in the foreign exchange rate
C. the loss resulting from an import purchase when a foreign currency appreciates
D. the loss resulting from an import purchase when a foreign currency depreciates
Answer:B
What is “asset exposure” to foreign exchange risk?
A. the possibility that an asset denominated in U.S. dollars will decline in value because of changes in the foreign exchange rate B. the possibility that an asset denominated in a foreign currency will change in value because of a change in the foreign exchange rate C. the loss resulting from an import purchase when a foreign currency appreciates D. the loss resulting from an import purchase when a foreign currency depreciates