The Reason an FI Receives a Fee When Purchasing Foreign

question 93

True/False

The reason an FI receives a fee when purchasing foreign currencies that allow customers to complete international transactions is because the FI assumes some FX risk.

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Definitions:

Markets For Factors

The arena in which services of the factors of production (such as labor, capital, and land) are bought and sold.

Economic Models

Economic models are simplified representations of the complex realities of economic activities to predict future economic behavior and outcomes.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing among multiple options.

Opportunity Cost

The cost of foregone alternatives when one option is chosen over another.