Explain why financial institutions generally engage in foreign exchange tradingactivities. Provide specific purposes or motivations behind such activities.
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Explain why financial institutions generally engage in foreign exchange trading
activities. Provide specific purposes or motivations behind such activities.
Step by step
Solved in 2 steps
- Why do financial institutions engage in foreign exchange trading activities? Discuss the motivations with examples.A) What is the geographical location of the foreign exchange market? B) What are the two main types of trading systems for foreign exchange? C) How are foreign exchange markets connected for trading activities?What is meant by Foreign Exchange Markets?
- What is international trade and how does it operate? How have international capital markets assisted international trade? What are the implications of international trade and globalization for banking operations?Define foreign currency hedges.Financial institutions engage in the purchasing and selling of foreign currencies for all of the following reasons except to: a. Hedge against foreign exchange exposures. b. Allow customers access to foreign markets to transact business. c. Avoid trading in speculative investments. d. Allow itself and/or customers to trade and invest in foreign financial markets.
