Companies may be affected by changes in the nominal exchange rate or in the real exchange rate.

Question:

Companies may be affected by changes in the nominal exchange rate or in the real exchange rate. Explain how this can occur. Which risks are easiest to hedge against?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...