Question

When recommending domestic corporate long-term debt instruments to a customer, which of the following risks is the LEAST important consideration? A. Inflation (purchasing power) risk B. Market risk C. Credit risk D. Currency exchange risk

Answer 1

Answer:

D. Currency exchange risk

Explanation:

If you must deal with only domestic long term investments, then you should not worry about the currency exchange risk. The currency exchange risk is extremely relevant and important when you are dealing with investments in foreign countries. The currency exchange risk refers to risks associated with the US dollar depreciating or appreciating against other foreign currencies.