Currency Risk Management || Trainer Anil Maurya Objective of the E- book To learn how to manage currency risk Key Learnings from the Video 1. What is Currency Risk? Currency risk is also called "exchange rate risk" that arises from the change in the price of one country's currency with respect to another. Investors or companies that have assets or business operations in other countries are exposed to currency risk. For example: An Indian company agrees to purchase $10,000 worth products every month from a US company. In this case, the Indian company has to convert INR into USD for making monthly payment to the US company. If the price of USD increases, the Indian company has to pay extra for the $10,000, then what they were paying earlier. This situation is called currency risk for the Indian company. 2. Types of Currency Risk i. Transaction Risk This risk arises when a company deals with another company in a country that has a...
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