What are the functions of a foreign exchange market?

1.	What are the functions of a foreign exchange market?
Answer» 1. Transfer Function: Transfer function refers to transferring of purchasing power among countries. 2. Credit Function: It implies provision of credit in terms of foreign exchange for the export and import of goods and services across different countries of the world. 3. Hedging Function: Hedging function pertains to protecting against foreign exchange risks. Where Hedging is an activity which is designed to minimize the risk of loss.

Answer»

1. Transfer Function: Transfer function refers to transferring of purchasing power among countries.

2. Credit Function: It implies provision of credit in terms of foreign exchange for the export and import of goods and services across different countries of the world.

3. Hedging Function: Hedging function pertains to protecting against foreign exchange risks. Where Hedging is an activity which is designed to minimize the risk of loss.

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What are the functions of a foreign exchange market?

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