Because of the greater exchange rate risk with flexible exchange rates,
A)U.S. exporters can use foreign exchange forward and futures agreements to lock in today the amount of dollars to be received at the date the transaction is completed.
B)futures markets are made illegal in international trade.
C)contracts have to be written at a "reasonable" size to eliminate the paperwork with smaller contracts.
D)futures markets increase the negative impact of flexible exchange rates on trade.

Question

Quizplus · Accepted Answer

With greater exchange rate risk under flexible exchange rates, U.S. exporters can use foreign exchange forward and futures agreements to lock in today the amount of dollars to be received at the date the transaction is completed. This can help mitigate the risks and uncertainties associated with fluctuating exchange rates.

Because of the Greater Exchange Rate Risk with Flexible Exchange