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CFA Level 3
Derivatives & Currency Mgmt

Understanding Currency Risk Factors

Medium Currency Management Currency Risk Factors

As a portfolio manager for an international investment firm, you are conducting a review of your firm's exposure to currency risk factors associated with its global equity investments. You understand that currency risk can significantly impact the total return of your investments, especially in a volatile economic environment.

Which of the following factors is primarily responsible for the changes in currency values and presents a currency risk that an international investor must consider?

Hint

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