Credit risk: Credit risk in foreign exchange involves the possibility that a counterparty may default on a contract. This risk is heightened in volatile markets or when dealing with less stable currencies. To manage credit risk, businesses often assess the creditworthiness of their partners and use credit derivatives.

Country risk: Country risk encompasses the economic, political and social factors that can affect currency stability. Events such as political unrest or economic sanctions can lead to significant currency devaluation and a downgraded Moody’s rating. Companies can mitigate country risk by conducting thorough country risk assessments and diversifying their investments.

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If you want to know how much you could pay in taxes for the sale on an investment,