The market for long-dated forward exchange rate contracts is thin, which decreases the cost of eliminating foreign-exchange risk.

Name: The market for long-dated forward exchange rate contracts is thin, which decreases the cost of eliminating foreign-exchange risk.
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A thin market for long-dated forward exchange rate contracts means that there are few buyers and sellers, which often leads to wider bid-ask spreads and higher costs for hedging foreign-exchange risk.

The Market for Long-Dated Forward Exchange Rate Contracts Is Thin