Using floating exchange rates will help countries reduce the risk of investing in foreign assets.

Name: Using floating exchange rates will help countries reduce the risk of investing in foreign assets.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The risk-reducing effects of international portfolio diversification would be greater were it not for the volatile exchange rates associated with the current floating exchange rate regime. Floating exchange rates introduce an additional element of risk into investing in foreign assets.

Using Floating Exchange Rates Will Help Countries Reduce the Risk