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:
“It tosses up our losses, the torn seine,
The shattered lobster pot, the broken oar
And the gear of foreign dead men. The sea has many voices,
Many gods and many voices.”
—T.S. (Thomas Stearns)
“But come what sorrow can,
It cannot countervail the exchange of joy
That one short minute gives me in her sight.”
—William Shakespeare (1564–1616)
“It’s a funny thing, the less people have to live for, the less nerve they have to risk losing—nothing.”
—Zora Neale Hurston (1891–1960)