Suppose Markets Are Efficient,there Are No Taxes,and Relative Prices Remain

question 4

Multiple Choice

Suppose markets are efficient,there are no taxes,and relative prices remain constant.In such a world,

• A)hedging can not still be of value
• B)exchange risk management remains of vital concern
• C)markets are always free of inflation
• D)exchange risk is nonexistent

---

Definitions:

Spirits of Ammonia

A solution of ammonia in water used as a stimulant, antacid, and astringent, historically in smelling salts to revive someone who has fainted.

Inhalant

A substance inhaled to give a pharmacological effect, often drugs, anesthetics, or volatile substances used recreationally.

Clotting

A process by which blood changes from a liquid to a gel, forming a blood clot, which is crucial for preventing excessive bleeding when the vascular system is injured.

Phlebotomist

A healthcare professional specialized in drawing blood from patients for medical testing, donations, or research purposes.