Risk
In this lesson, you'll learn the three main currency risks companies face when trading internationally: transaction risk, economic risk, and translation risk. Understanding these risks is essential for FM and AFM papers, as they directly affect investment appraisal decisions and shareholder wealth.
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In this lesson
- 0:00 International currency risks overview
- 0:15 Transaction risk and short-term exposure
- 0:40 Economic risk and long-term impact
- 1:07 Translation risk and consolidation effects
- 1:42 Economic risk in investment appraisal
About this lesson
You'll discover how exchange rate fluctuations impact short-term cash flows, long-term competitiveness, and the consolidation of foreign assets—and why economic risk can significantly alter the net present value of overseas projects. This knowledge helps you evaluate international investments confidently and recognise how currency exposure shapes business decisions.
Duration: 3m
Transcript
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