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The Risks of Currency Risk
When institutional investors in America and Europe invest they want to hedge themselves from these kinds of risks that they're unfamiliar with hedging involves one company paying another company for a risk they don't want to take. If you're an American investor with assets in India and you're worried that the Indian rupee could fall in value you would ask a bank to take care of that risk for you if the rupee does fall the bank will deal with the losses and you'll still get the exchange rateyou agreed with the bankif the rupee rises in value the bank makes money but you still get the same exchange rate.
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