The terms "foreign exchange exposure" and "foreign exchange risk" are often used equivalently, but in fact, they are completely different things. Foreign exchange risk refers to the sensitivity of the local currency value of assets or liabilities to exchange rate changes. For example, if the market value of a company changes due to exchange rate fluctuations, then the company will be affected. The greater the change in the company's market value, the more sensitive it is, or the greater its exposure. On the other hand, foreign exchange risk refers to the fluctuation of the local currency value of assets or liabilities due to unexpected changes in exchange rates. For example, if a company is exposed to foreign exchange risks, it will inevitably be affected and the exchange rate will inevitably change unpredictably. The greater the unpredictability of the exchange rate, the greater the foreign exchange risk-at least given the foreign exchange exposure.