7 of 2S The advantages of a floating exchange rate system are: A Needs an intern

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7 of 2S The advantages of a floating exchange rate system are: A Needs an international body to keep order in the market. B.Makes the economy prone to outside shocks. O C.You can speculate and may lose a lot of money OD.it leaves the national govemment free to implement the monetary and fiscal policy that suits its economy. D.it leaves the n Reset Selection Mark for Review What's This? Question 18 of 25 The Foreign Exchange Market is: A.Is the largest market in the world with over $5 trillion daily volume and is traded electronicaly over the net B.ls controlled by retail foreign exchange kiosks. C.Is dominated by money changers at airports D.Located in London but also trades electronically O Mark for Review What's This? Question 19 of 25 Euro 5000,000 worth of french wine in three month to resell here and want to know your purchase price in dollars in advance you would Euro appreclatos against the dolar Euro contract for 3 months from now to make sure your cost stays the same even B.Sell a forward contract for 3 months from C.Try to convince your supplier to take dollars from you in 3 months. D. Not do anything and wait 3 months and convert your dollars to Euro then. now since you expect for Euro to depreciate against the dolar. Mark for Review What's This? Question 20 of 25 The following engage in FOREX trading: AAll of the above B.Central Banks and Electronic Brokerage Services C.Banks and Hedge funds, D.Individual speculators from their dosktops

Explanation / Answer

17)The advantage of floating exchange rates is it leaves the national government to make monetary and fiscal policy that suits the economy. The correct answer is "D".

18) A forex market is the largest market in the world trading over trillions of dollars every day. The correct answer is "A".

19) The correct answer to this question is "A". The person can buy a forward contract that will save him from the risk of currency fluctuations in the three month period.

20) Correct answer "A". All the given options indulge in foreign exchange trading.

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