Question

What risk could a business suffer from while dealing with its overseas client?

A
dollar appreciation
B.
labor trouble in its own setup
C.
cyclone in United States
D.
operational inefficiency
E.
varying rate of interest

Answer 1

I'd say the answer would he a

Answer 2

The correct answer is "A".

The difference in exchange rates between currencies is an important factor whenever a company wants to sell their goods abroad. Besides the existent freight, customs, or tax costs that could be involved in overseas dealings, the value of certain good or service is subject to constant variations due to the fluctuation of exchange rates. For example, as a selling its goods to the US, a depreciation of its currency compared to the dollar is favorable, as he would end up getting more local currency once he gets paid.