Question 1
Currency risk is based on what assumption?
◦ Firms that do not continuously innovate will lose market share.
◦ Changing product lines by reacting to every current trend may alienate the customer base.
◦ Values of foreign currencies continually rise and fall in most countries.
◦ The value of one dollar today is greater than the value of one dollar to be received one year from now.
◦ The U.S. stock market fluctuates daily.
Question 2
Governmental attitudes toward issues such as private property, intellectual property, zoning, pollution, and employment stability may change over time. The term associated with this phenomenon is
◦ judicial risk.
◦ legislative risk.
◦ bureaucratic risk.
◦ political risk.
◦ democratic risk.