2 When the exchange rate fluctuates in an unanticipated dire

2. When the exchange rate fluctuates in an unanticipated direction or to an unanticipated degree this results in
a. Credit risk
b. Foreign exchange risk
c. Interest rate risk
d. tax risk
e. None of the above

Solution

b.foreign exchange risk.

When exchange rate fluctuates in an unanticipated direction or to an unanticipated degree this results in foreign exchage risk.

credit risk is the risk of non payment of debt by borrower.

Interest rate risk is the risk that interest rates will change in the future.

Tax risk arises due to the fact that there may be risk that tax exposure of the company increases.