The forward market enables companies to transfer foreign exchange risk to professionals who are in the business of bearing such risks.

Question

Quizplus · Accepted Answer

This is true. In the forward market, companies can hedge against foreign exchange risk by entering into contracts with professionals who specialize in managing such risks. This allows companies to protect themselves from losses due to currency fluctuations while also allowing them to focus on their core business activities.

The Forward Market Enables Companies to Transfer Foreign Exchange Risk