[Series 65] 16, Currency Risk and Political Risk

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - That a strengthening U.S. dollar negatively impacts the returns of a U.S. investor holding foreign securities like ADRs. - The critical distinction between sovereign risk (a government defaulting on its debt) and regulatory risk (a government changing laws). - Why American Depositary Receipts (ADRs), despite trading in U.S. dollars, are fully exposed to currency exchange risk. - The primary exam-tested strategy to hedge against a decline in a foreign currency's value is buying put options on that currency. - The mnemonic "Strong Dollar Shrinks" to remember that a stronger U.S. dollar reduces the value of foreign investment returns. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep