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Exchange risk |
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Exchange risk The variability of a firm's value that results from unexpected exchange rate changes, or the extent to which the present value of a firm is expected to change as a result of a given currency's appreciation or depreciation. Exchange risk In currency exchange, the possibility that one currency will devalue to the exchanger's detriment. For example, someone may move to the United Kingdom from the United States and change all of his/her money from dollars to pounds. If he/she moves back to the United States with the same amount of pounds, there is the possibility that the pound will have devalued, resulting in fewer dollars than he/she brought to the U.K. In 1996, economist Conway Lackman suggested an extension of the Capital Asset Pricing Model to help calculate exchange risk in international trade. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| The American dollar is the legal currency, eliminating the currency exchange risk, and the nation has one of the lowest interest rates in the region. dollars to eliminate currency exchange risk for the Wien & Malkin partnership. Dollar and other hard currency borrowing without an exchange risk would vastly increase the Fund's ability to tap private and other markets in times of dire need. |
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