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Hello sir i have a question concerning the FOREX. Its a theory question.
GN co whose home currency is dollar has exported products to Europe for several years and all European customers pay on credit basis in euros.
It now plan to invest in a European storage, packing and distribution network. The investment will cost €13m and is financed by equal amount if equity and debts.
Which of the following currency risk is GN exposed to? The answer is all the economic transactions and translation risk.
How does transactions and translation risk relate to this???