The major sources of financial uncertainty for firms engaged in international business arise from changes in exchange rates and changes in exchange controls — events which are not readily predictable. The risks of changes in exchange rates — both of changes in parities under a pegged rate system and fluctuations under a floating rate system — are inherent in a system of national currencies, just as the risks of changes in exchange controls and of expropriation are inherent in a system of multiple sovereigns.
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