Answer:
C. Foreign Exchange Risk
Step-by-step explanation:
Foreign Exchange Risk is a known risk that a loss might occur in an international transaction due to currency fluctuations.
This risk is also referred to as the Currency risk, Exchange-rate risk or the FX risk. Another risk that may arise for investors as a result of foreign exchange risk is the Jurisdiction risk.
Types of Foreign Exchange Risk
1. Transaction Risk - A company buying goods or services or transacting businesses with another company in another country is liable to this risk because the foreign exchange will be required for financial negotiations and may be subjected to currency fluctuations.
2. Translation Risk- This may occur for an organisation that has subsidiaries in foreign countries. Since the financial statement of the subsidiaries is prepared in the foreign country's currency, translating them back to the home country's currency could be subject to currency fluctuations that may affect profit or losses.
3. Economic Risk - This risk also referred to as the forecast risk occurs when the market value of a company is constantly exposed to unavoidable currency fluctuations.