Why Might the Federal Reserve Intervene in Foreign Currency Markets

question 228

Multiple Choice

Why might the Federal Reserve intervene in foreign currency markets?

• A) to ensure the safety of overseas investments for banks
• B) to ensure the safety of overseas investments for private investors
• C) to ensure the safety of overseas investments for pension funds
• D) to maintain a desired exchange rate for the dollar

---

Definitions:

Probability Distribution

A statistical function that describes all the possible values and likelihoods that a random variable can take within a given range.

Mean

The average value of a set of numbers, calculated by dividing the sum of all the numbers by the count of items in the set.

Uniform Probability Distribution

A type of probability distribution where all outcomes are equally likely to occur.

Random Variable

A variable whose possible values are numerical outcomes of a random phenomenon or experiment.