Which of the following statements is true about the current monetary s

QUESTION

Which of the following statements is true about the current monetary system?

A. Use of instruments such as the forward market and swaps has decreased since the breakdown of the Bretton Woods system.

B. The present monetary system lacks the volatile movements in exchange rates that existed in a fixed exchange rate system.

C. The current foreign exchange market works exactly as depicted in the purchasing power parity theory.

D. Instruments such as the forward market and swaps increase the foreign exchange risk a company faces.

E. A combination of government intervention and speculative activity drives the current foreign exchange market.

ANSWER

E