One function of the foreign exchange market is to provide some insurance against the risks that arise from changes in exchange rates,commonly referred to as:
A)foreign market hazard.
B)global jeopardy.
C)foreign exchange risk.
D)commerce uncertainty.

Question

Quizplus · Accepted Answer

The function described refers to foreign exchange risk, which is the risk of loss that arises from changes in currency exchange rates. This risk is managed through transactions in the foreign exchange market, such as hedging and speculation. Options A, B, and D do not accurately describe this function of the foreign exchange market.

One Function of the Foreign Exchange Market Is to Provide