Managers prefer that exchange rates be ________.

Question

Quizplus · Accepted Answer

Managers prefer stable exchange rates as it provides certainty and predictability in international trade transactions, reduces currency risk, and helps to plan and forecast effectively.

B) Freely floating exchange rates can be beneficial for businesses engaged in international trade as they reflect market forces and are flexible, but this unpredictability may also increase currency risk and uncertainty.

C) Volatile exchange rates can be detrimental for businesses engaged in international trade as it increases currency risk and uncertainty, making planning and forecasting difficult.

D) Unpredictable exchange rates are not preferred by managers as it increases currency risk and uncertainty, making planning and forecasting difficult.

Managers Prefer That Exchange Rates Be ________