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Finance Dictionary and Glossary of Investment Terms
exchange rate risk
Definition 1.
The risk that a business' operations or an investment's value will be affected by changes in exchange rates. For example, if money must be converted into a different currency to make a certain investment, changes in the value of the currency relative to the American dollar will affect the total loss or gain on the investment when the money is converted back. This risk usually affects businesses, but it can also affect individual investors who make international investments. also called currency risk.
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Definition 2.
Also called currency risk; the risk that an investment's value will change because of currency exchange rates.
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