Question

A U.S. timber products firm has a long-term contract to import unprocessed logs from Canada. To avoid occasional and unpredictable changes in the exchange rate between the U.S. dollar and the Canadian dollar, the firms agree to split between the two firms the impact of any exchange rate movement. This type of agreement is referred to as:_________

Answer 1

Answer: Risk sharing

Explanation:

 The risk sharing is one of the strategy for avoiding the risk during the development process and the risk sharing is also called as the risk distribution process.

The risk sharing is the process that involve the business partnership for sharing the various types of risk responsibility in an organization. In the risk sharing process each of the member in the business partnership hold all the business losses.

 According to the question, the given type of the agreement is referred as the risk sharing process.

Therefore, The risk sharing is the correct answer.