foreign exchange risk

This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.

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January 24, 2021 at 7:02 pm #607815
adarsh1997
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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
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It eliminates the transaction risk but it does not eliminate the economic risk.
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