ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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encourage globalization
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assist developing countries
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facilitate currency conversions
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stabilize the currency exchange rate
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Detailed explanation-1: -Foreign exchange markets facilitate the trade of one foreign currency for another. Most exchanges are made in bank deposits and involve U.S. dollars. Over a trillion dollars in foreign exchange trades take place every day; foreign exchange dealers handle most transactions.
Detailed explanation-2: -The main functions of the market are to (1) facilitate currency conversion, (2) provide instruments to manage foreign exchange risk (such as forward exchange), and (3) allow investors to speculate in the market for profit.
Detailed explanation-3: -Key Takeaways. Foreign exchange, also known as forex, is the conversion of one country’s currency into another.
Detailed explanation-4: -The foreign exchange market serves two main functions. These are: convert the currency of one country into the currency of another and provide some insurance against foreign exchange risk.