Question: Short answers What are the three basic foreign exchange risks companies face doing business internationally? (3 marks) Which risk concerns exchange of goods and services

Short answers

  • What are the three basic foreign exchange risks companies face doing business internationally? (3 marks)
  • Which risk concerns exchange of goods and services for payment? (1 mark)
  • Explain what the risk you identified in (b) involves and how a forward exchange contract can manage this risk. (4 marks)
  • What are two disadvantages of a forward exchange contract? (2 marks)

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