Currency risk: Difference between revisions
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imported>Administrator (CSV import) |
imported>Doug Williamson m (Spacing and numbering) |
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The risk that arises from a change in currency rates. | The risk that arises from a change in currency rates. | ||
This can take the form of | This can take the form of: | ||
#a receipt/payment of more or less home currency than expected when a transaction is settled (transaction risk) | |||
#a change in asset/liability values in a balance sheet, profit /loss in an income statement (translation risk), or | |||
#a change in competitiveness as rates change relative to buyers, suppliers or competitors (economic risk). | |||
A more complex area of risk concerns contingent, or pre-transaction risk. | A more complex area of risk concerns contingent, or pre-transaction risk. | ||
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* [[Transaction exposure]] | * [[Transaction exposure]] | ||
* [[Translation exposure]] | * [[Translation exposure]] | ||
Revision as of 13:00, 5 August 2013
The risk that arises from a change in currency rates.
This can take the form of:
- a receipt/payment of more or less home currency than expected when a transaction is settled (transaction risk)
- a change in asset/liability values in a balance sheet, profit /loss in an income statement (translation risk), or
- a change in competitiveness as rates change relative to buyers, suppliers or competitors (economic risk).
A more complex area of risk concerns contingent, or pre-transaction risk.
Also known as Currency exposure or Foreign exchange risk.
