Foreign Exchange Risk
When companies conduct business across borders, they must deal in foreign currencies. Companies must exchange foreign currencies for home currencies when dealing with receivables, and vice versa for payables. This is done at the current exchange rate between the two countries. Foreign exchange risk is the risk that the exchange rate will change unfavorably before the currency is exchanged.
Read more about this topic: Foreign Exchange Hedge
Famous quotes containing the words foreign, exchange and/or risk:
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—Samuel Butler (1835–1902)
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—Henry David Thoreau (1817–1862)
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—Stanley Turecki (20th century)