Transaction risk and transformative risk are the two forms of short-term consequences on currency movements.
Some businesses are exposed to foreign currency risk in the form of both transaction risk and translation risk. Transaction risk arises when exchange rates fluctuate between the time a transaction is made and the time its payment conditions are eventually fulfilled in a foreign currency.
Despite the high level of risk involved in the investment, the investor is often more focused on making a profit based on fluctuations in the investment's market value than on long-term investing. Currency speculation is the process of investing speculatively when buying foreign currency is involved.
Learn more about transformative risk: https://brainly.com/question/17277098
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