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A financial intermediary takes the small deposits of millions of savers and uses them to buy an issue of government (treasury) bills and bonds.
Identify from the list below the principle this illustrates:
The use of hedging is to reduce or eliminate exposure to which of the following?
1. Credit risk
2. Economic risk
3. Transaction risk
4. Transition risk.
If a country were to join a currency union (for example, the European single currency, the Euro), its businesses would experience all of the following except which one?
Which of the following will result in an increase in demand for domestic currency?
In a system of freely floating exchange rates the central bank and government will