Question: What is the difference between foreign exchange risk arising from translation, transactions and economic risk? What derivative securities can be used to hedge the effects

  1. What is the difference between foreign exchange risk arising from translation, transactions and economic risk?
  2. What derivative securities can be used to hedge the effects of fluctuations in currency values on the cash flows of firms and investors?
  3. Describebriefly the main sources of finance for international trade and investment.Distinguish between short-term and long-term finance sources.

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