_1). is a market for The foreign exchange market converting the currency of one country into that of another country. _2). An exchange rate is simply the rate at which one currency is converted into another. 3). The rate at which one currency is converted into another can change over time.
_1). is a market for The foreign exchange market converting the currency of one country into that of another country. _2). An exchange rate is simply the rate at which one currency is converted into another. 3). The rate at which one currency is converted into another can change over time.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:Write
True
if
the
statement
is
correct
and
write
False
if
the
statement is incorrect.
1). The foreign exchange market
is a market for
converting the currency of
one country into that
of another country.
An exchange
2).
rate
is simply
the rate at which one
currency is converted into
another.
3).
The
rate
at
which
one
currency is converted into
another can change over time.
4).
The foreign exchange market
serves to convert the
currency of one country into
the currency of
another.
5).
The foreign exchange market
serves to provide some
insurance against foreign
exchange risk, by which
we
mean
the
adverse
consequences of unpredictable
changes in exchange rates.
6).
When
a
tourist changes
one
currency into another,
she is participating in the
foreign exchange
market.
7). To
home country, the company
use
those
funds
in its
must convert them to its home
country's currency.
8).
Currency
speculation
is
another use of foreign
exchange markets.
9). International businesses
use
foreign exchange
markets when they have spare
cash that they wish
to invest for short terms in
money markets.
D in
10). The foreign exchange market
is the lubricant that
enables companies based in
countries that use
different currencies to trade
with each other.
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