Question

analyse the main form of risk and uncertainty that may arise in international transactions and discuss the ways in which this risks can be recovered

Answer 1

Answer:

In the International Environment Risk and Uncertainties are obvious and are integral part of the International Transaction .The law , Government Policies and many others Change may causes a great risk and uncertainties to the person or business dealing in international environment and these may be proved Profitable as well as Loss giving .

The Main Risk Uncertainties :-

Foreign Exchange Risk :- Price fluctuation is the Obvious in the international Transaction which is High uncertain and at a time may prove to be risky for business and burden a loss .

Traders , Import, Export ,Investors mainly are effected by Foreign currency risk exposure.

Credit risk.:- The counter party for which goods are exported may not perform its obligation arising out of such transaction

Intellectual property risk:- The Risk is Greater in international Environment that the copyright trademark may get infringed if product is taken there

Shipping Risk :

There are number of hurdles for the goods arrive in the Foreign country by way of water , air , Seaway .It may get damaged due to any uncertainties

Ethics Risk :-

The Ethics on part of any party dealing in any Business international Transaction may arise .

Someof the ways in which International Transaction risks can be recovered:-

1. Risk Sharing.
2. Cross hedging.
3. Natural hedging.
4. Diversification
5. Leading and lagging.
6. Payments netting.

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