The decrease in European FX volatility during the last decade has occurred because of
A)the stabilizing force of the euro.
B)reduction in inflation rates in European countries.
C)the reduced volatility in many emerging-market countries.
D)the greater volatilities of Asian currencies.
E)the stabilizing force of the euro and reduction in inflation rates in European countries.

Question

Quizplus · Accepted Answer

The stabilizing force of the euro and reduction in inflation rates in European countries have both contributed to the decrease in European FX volatility during the last decade. While option C may also have played a role, there is no mention of it being a significant factor. Options A and D are incorrect, as they are not supported by evidence or reasoning.

The Decrease in European FX Volatility During the Last Decade