Which of the Following Statements Is True About the Current

question 119

Multiple Choice

Which of the following statements is true about the current monetary system?

• A)Use of instruments such as the forward market and swaps has decreased since the breakdown of the Bretton Woods system.
• B)The present monetary system lacks the volatile movements in exchange rates that existed in a fixed exchange rate system.
• C)The current foreign exchange market works exactly as depicted in the purchasing power parity theory.
• D)Instruments such as the forward market and swaps increase the foreign exchange risk a company faces.
• E)A combination of government intervention and speculative activity drives the current foreign exchange market.