Suppose markets are efficient,there are no taxes,and relative prices remain constant.In such a world,
A)hedging can not still be of value
B)exchange risk management remains of vital concern
C)markets are always free of inflation
D)exchange risk is nonexistent

Question

Quizplus · Accepted Answer

Exchange risk management remains of vital concern even in a world where markets are efficient, there are no taxes, and relative prices remain constant. This is because exchange risk is the risk that the value of a currency will change, which can affect the value of investments and other assets. Even in a world where markets are efficient and there are no taxes, exchange rates can still fluctuate, which can lead to losses for investors.

Suppose Markets Are Efficient,there Are No Taxes,and Relative Prices Remain