SIE practice questionmediumCurrency/exchange rate risk
A U.S. investor earns a positive return in Japanese equities, but due to a weakening yen, the investor experiences a loss in U.S. dollars. This demonstrates:
- AInflation risk
- BBusiness risk
- CCurrency/exchange rate risk✓ Correct answer
- DConcentration risk
Explanation
Why C — Currency/exchange rate risk
Currency risk involves losses from adverse exchange rate movements. The other types of risk do not involve currency conversion.
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