APICS Certified in Logistics, Transportation and Distribution (CLTD) — Question 75

Which of the following is a speculative risk that an exporter should consider when deciding the currency to use to complete the transaction with an importer?

Answer options

• A. Exchange rate fluctuation
• B. Currency convertibility
• C. Translation
• D. Government control on import payment

Correct answer: C

Explanation

Translation risk is a speculative concern for exporters as it pertains to the potential changes in currency value when converting financial statements. The other options, such as exchange rate fluctuation and currency convertibility, are more related to transactional risks rather than speculative risks, while government control on import payment deals with regulatory aspects.