Meaning of exchange risk in English
(Definition of exchange risk from the Cambridge Business English Dictionary © Cambridge University Press)
Examples of exchange risk
exchange risk
Forward contracts can be used to hedge or cover exposure to foreign exchange risk.
Other types of financial risks, such as foreign exchange risk or stock market risk, can be immunized using similar strategies.
It prevents negative foreign exchange risk for either party.
Foreign exchange risk is the risk that the exchange rate will change unfavorably before payment is made or received in the currency.
A deviation from one or more of the three international parity conditions generally needs to occur for an exposure to foreign exchange risk.
Hedging is a way for a company to minimize or eliminate foreign exchange risk.
Companies may also use them to avoid foreign exchange risk.
These instruments are commonly used for currency speculation and arbitrage or for hedging foreign exchange risk.
Unlike covered interest arbitrage, uncovered interest arbitrage involves no hedging of foreign exchange risk with the use of forward contracts or any other contract.
This creates exchange risk for any account holder, in the same way one would experience exchange risk by holding a bank account in a foreign currency.
These examples are from corpora and from sources on the web. Any opinions in the examples do not represent the opinion of the Cambridge Dictionary editors or of Cambridge University Press or its licensors.
