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foreign exchange risk

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › foreign exchange risk

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
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  • January 24, 2021 at 7:02 pm #607815
    adarsh1997
    Participant
    • Topics: 646
    • Replies: 282
    • ☆☆☆☆

    Hello John,

    – “Invoicing in dollars will eliminate all foreign exchange risk that a company is exposed to”

    1. In the kit the statement is regarded as False. Could you please explain why so?
    – When we invoice in the home currency, we don’t suffer from exchange gain or loss; therefore eliminate the risk.

    Thanks

    January 25, 2021 at 9:06 am #607870
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54664
    • ☆☆☆☆☆

    It eliminates the transaction risk but it does not eliminate the economic risk.

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