Describe at least three risks a company might face if it participates in global trade.

Foreign exchange risk: Foreign exchange risk usually concerns accounts receivable and payable for contracts that are or soon will be in force. Foreign exchange rates are constantly in flux, so businesses can be forced to convert funds generated abroad at lower rates than they budgeted.

Credit risk: Credit or counterparty risk is the risk of not collecting an account receivable. There are ways businesses expanding to global markets can protect themselves against this risk

Intellectual property risk : Intellectual property risk is the risk that third parties may make unauthorized use of the business's strategic information (studies, research, agreements and contracts, client list, trade secrets, etc.) or property that directly or indirectly affects the value of the business's products or services (patents, designs, trademarks, know-how, etc.). When doing business internationally, these risks increase tenfold because of the difficulty of remotely defending the business's rights to this property.

Shipping risks: Whether shipping goods locally or abroad, you face risks such as breakage, loss, theft, vandalism, accident, seizure and contamination. Before you ship any goods, transfer responsibility for shipping to the buyer or seller and take out sufficient insurance. The International Chamber of Commerce's Incoterms set out each party's roles and responsibilities with regard to shipping risk. It is best to work with a forwarding agent.

Explanation:

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