All of the Following Statements Regarding the Effects of Exchange

question 33

Multiple Choice

All of the following statements regarding the effects of exchange rates on international portfolio diversification are true,except:

• A)the volatile exchange rates associated with the current floating exchange rate regime increase the risk-reducing effects of international portfolio diversification.
• B)floating exchange rates introduce an additional element of risk into investing in foreign assets.
• C)adverse exchange rate movements can transform otherwise profitable investments into unprofitable investments.
• D)uncertainty engendered by volatile exchange rates may act as a brake on the otherwise rapid growth of the international capital market.

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Definitions:

Upper Paleolithic

The final phase of the Paleolithic period, marked by significant advancements in technology, art, and cultural complexity among early humans.

Neolithic

The final stage of cultural evolution or technological development among prehistoric humans, characterized by the transition from nomadic hunting and gathering to settled farming and community living.

Biological Traits

Characteristics or features of organisms that can be observed and are often determined by genetic inheritance.

Gene Flow

The transfer of genetic material from one population to another, enhancing genetic diversity within populations.