Indirect Intervention How can a central bank use indirect intervention to change the value of a currency?

Q: why is political stability is one of the factor of foreign exchange market

A: The foreign exchange market, also known as the forex market or FX market, is a decentralized market…

Q: A country with a fixed exchange rate experiences downward pressure on the exchange rate value of its…

A: The exchange rates in financial markets are rates at which the currencies of different countries are…

Q: What is meant by Foreign Exchange Markets?

A:

Q: What are the impacts of Financial globalization?

A: Financial globalization - It is the integration of the financial markets through cross border…

Q: How do the central banks implement expansionary monetary policy using monetary policy tools?…

A: Solution Step (1) Expansionary Monetary Policy The expansionary fiscal policy works by increasing…

Q: A currency which is in the digital form and without government's control is called: a. Crowd funding…

A: Crowd funding means raise funds required from different people at large.…

Q: Devalued currency may be a good reason for a country to:   a. import.   b. export.   c.…

A: Devaluation is referred to as the adjustment in a country's currency value in a downward trend. It…

Q: Firms typically hedge their foreign exchange exposure to: A. Speculate on currency movements. B.…

A: C. Reduce the uncertainty of future cash flows. Firms frequently do business with other countries,…

Q: 3. Consider the monetary neutrality. Suppose that the central bank changed the money supply.…

A: Money Neutrality is an economic theory which states that the change in the supply of money or stock…

Q: what factors affecting foreign exchange market? explain each factor

A: When the goods are bought or imports from other country are done then these goods or bought in our…

Q: Explain how exchange rate fluctuations affect the return from a foreign market measured in dollar…

A: When doing business outside country of home currency dollars there is risk of change in exchange…

Q: Who are the players in the foreign exchange market?

A: The currency market, often known as the foreign exchange market, is a global decentralized or…

Q: Define short exposure and explain the relationship between the variability of the domestic currency…

A: Domestic currency is referred to as the legal tender in an economy as well as issuance through the…

Q: How foreign currency risk can affect the value of a multinational company?

A: Foreign currency risk is the risk due to change in the value of domestic currency with respect to…

Q: Question 4 There are two main functions of foreign exchange market; to convert the currency of one…

A: It the place where of one country is converted into currency of the other country.  It is a Over The…

Q: emergence

A: Cryptocurrencies are digitally fabricated currencies, that are useful mediums to do online…

Q: Compare and contrast transaction exposure and economic exposure

A: SOLUTION:- Transaction exposure is the danger a MNC faces when it executes a particular exchange…

Q: Explain why a country under monetary unions do not have assess to monetary policy

A: A monetary union is group of different nations coming together to accept a common currency to be…

Q: What is the difference bet

A: There are many types of traders in the market and each trader has their own objective in the market…

Q: 21. What is the upside of utilizing cash in exchange as thought about to deal exchange?

A: The foreign exchange market deals with currency in different countries. It includes the exchange of…

Q: Which of the following is considered as cash equivalents? Bank overdraft Trade AR Money orders All…

A: Cash and cash equivalents are those short term assets which can be converted into cash in short…

Q: Why do financial institutions engage in foreign exchange trading activities? Discuss the motivations…

A: The objective of this question is to understand the reasons why financial institutions engage in…

Q: Foreign Currency Risk Mitigation Strategies

A: Foreign currency risk refers to the potential loss that a business may face due to fluctuations in…

Q: What has been the role of IMF loans in international affairs addresing financial crisis? Why are…

A: International Monetary Fund or IMF is defined as an organization, which includes 190 countries as a…

Q: Explain how multinational companies can reduce the foreign currency risk by hedging.

A: The multinational companies are exposed to the foreign currencies because they are operating in…

Q: chains of events affected the Foreign Exchange Rates long term and short term

A: Factors affecting foreign exchange rates in short term: Interest rates: depreciation or appreciation…

Q: what's the required condition for a country's Current Acoount Balance to improve after the…

A: Current account deficit is implies the value of imports of (goods/services/investment incomes) is…

Q: Which of the following is not an example of sovereign risk? a. Changes in tax rates b. Changes…

A: The objective of the question is to identify which of the given options does not represent an…

Q: What is currency manipulation?

A: Introduction: Currency manipulation is considering as when countries purposely impact the exchange…

Q: Do U.S. GAAP and IFRS differ in how bank overdrafts are treated? Explain.

A: Generally Accepted Accounting Principles:   GAAP (Generally Accepted Accounting Principles) is a…

Q: What action should the Hong Kong Monetary Authority (which is acting as Central Bank for Hong Kong)…

A: Hong Kong Monetary Authority worked under the Banking Ordinance and the Exchange Fund Ordinanc, and…