If Foreign Exchange Markets Are Efficient,all of the Following Will

question 21

Multiple Choice

If foreign exchange markets are efficient,all of the following will hold EXCEPT:

• A)exchange rates change only when new information arrives
• B)exchange rates change randomly
• C)incremental changes of exchange rates depend on the current level of the exchange rate
• D)the current exchange rate reflects all relevant information

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Definitions:

Internal Control System

A process implemented by management and other personnel to provide reasonable assurance regarding the achievement of objectives in effectiveness and efficiency of operations, reliability of financial reporting, and compliance with laws and regulations.

Purpose

The reason for which something is done or created, or for which something exists.

Voucher System

An accounting system that involves preparing and approving vouchers before transactions are recorded and payments made, to ensure financial controls.

Control Procedures

Measures and policies implemented by a company to ensure the integrity of financial and accounting information and compliance with laws and regulations.