7 of 25 The advantages of a floating exchange rate system are: O A Needs an inte

Question

7 of 25 The advantages of a floating exchange rate system are: O A Needs an international body to keep order in the market B. Makes the economy prone to outside shocks. C.You can speculate and may lose a lot of money national govemment free to implement the monetary and fiscal policy that suits its economy Reset Selection Mark for Review What's This? Question 18 of 25 The Foreign Exchange Market is: O A.ls 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 If you are an importer buying Euro 5000,000 worth cf buying 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 a forward Euro contract for 3 months from now to make sure your cost stays the same even & Euro appreciates against the A Buy B.Sell a forward contract for 3 months from now since you expect for Euro to depreciate 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. against the dolar. Mark for Review whatSThis? 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

First question is answered below

Correct option : (D)

Reason: Under floating exchange rate, the government can alter its monetary and fiscal policy from time to time to manage the exchange rate and bring it back to its desired level.

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