Foreign exchange transactions are easy and inexpensive and even large transactions can be made without affecting market prices because:
A)of the government regulations that apply to foreign exchange markets.
B)speculators keep the foreign exchange markets very active.
C)the foreign exchange markets are so large.
D)the foreign exchange markets are so old and well-established.

Question

Quizplus · Accepted Answer

The foreign exchange market is the largest financial market in the world, with an average daily turnover of $5.1 trillion in 2016. This means that even large transactions can be made without significantly affecting market prices. Additionally, foreign exchange markets operate globally, with participants from multiple countries, making them difficult to manipulate or regulate. Speculators do play a role in foreign exchange markets, but they also contribute to market efficiency by providing liquidity and facilitating trade.

Foreign Exchange Transactions Are Easy and Inexpensive and Even Large