Overview
International financial risk assessment is essential for businesses operating in a global environment. It involves identifying and evaluating various risks, such as currency, credit, market, and operational risks, that can impact financial performance. Understanding these risks allows companies to m...
Key Terms
Example: A U.S. company exporting to Europe may lose money if the Euro weakens against the Dollar.
Example: A bank faces credit risk when lending to a foreign company with a poor credit history.
Example: Investors may lose money if stock prices drop unexpectedly.
Example: A bank may face operational risk if its IT systems fail during a transaction.
Example: Investors may withdraw funds from a country facing civil unrest.
Example: A company may hedge against currency risk by using forward contracts.