An Important Effect of Foreign Currency Speculators Is That

question 80

Multiple Choice

An important effect of foreign currency speculators is that

• A)they have consistently lost money and have left the market.
• B)they have pushed exchange rates to wider extremes than most economists predicted.
• C)they actually limit the volatility of exchange rate movements.
• D)they have had no effect at all on exchange rate volatility.

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Definitions:

Investment Projects

Initiatives undertaken by a business or individual involving the allocation of resources with the expectation of generating future returns.

Profitability Index

A financial tool used to evaluate the attractiveness of an investment by calculating the ratio of the present value of future cash flows to the initial investment cost.

Investment Proposals

Formal suggestions for investing in specific projects or assets, typically evaluated for potential returns, risks, and strategic fit with the company.

Profitability Index

A financial metric that measures the return on investment for a project or investment by dividing the present value of future cash flows by the initial investment.