Multiple choice

Foreign exchange risk is a part of

  1. credit risk

  2. market risk

  3. operational risk

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Operational risk for foreign exchange in particular involves problems with processing, product pricing and valuation. These problems can result from a variety of causes, including natural disasters, which can cause the loss of a primary trading site or a change in the financial details of the trade or settlement instructions on FX transactions.

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