The Three Economic Benefits Provided by the Foreign Exchange Markets

question 42

Multiple Choice

The three economic benefits provided by the foreign exchange markets include:

• A) A mechanism to transfer purchasing power from individuals who deal in one currency to people who deal in a different currency.
• B) A way for companies to pass the risk associated with foreign exchange price fluctuations to professional risk-takers.
• C) A channel for importers and exporters to acquire credit for international business transactions.
• D) All of the above

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Definitions:

Standard Deviations

A measure of the amount of variation or dispersion of a set of values.

Normal Curve

A symmetrical, bell-shaped curve that represents the distribution of many types of data where most values cluster around the mean.

Inferential Statistics

The branch of statistics that allows one to make predictions or inferences about a population based on a sample of data taken from that population.

Normal Distribution

A statistical distribution where data is symmetrically distributed around the mean, forming a bell-shaped curve.