The use of the forward market and swaps to protect against foreign exchange risk has increased markedly since:

Question

Quizplus · Accepted Answer

The collapse of the Bretton Woods system in 1973 marked the end of a fixed exchange rate regime and the beginning of a floating exchange rate system. This increased uncertainty and volatility in foreign exchange markets, leading to a greater use of forward contracts and swaps to manage foreign exchange risk.

The Use of the Forward Market and Swaps to Protect