Question

The International trading of stock has grown over time but has been limited by barriers except:...

The International trading of stock has grown over time but has been limited by barriers except:

A.

transaction costs
B.

information cost
C.

exchange rate risk
D.

market efficiency
E.

None
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Answer #1

Trading in international stocks is limited as compare to the domestic stock market mainely beacuse of the exchange risk involved in the transaction which is in addition to the regular market risk. As market risk is always in domestic as well as international market.

But, while trading in international stockes one has to also take the exchange rate risk into consideration and they must ensure the proper hedging to reduce the exchange rate risk which also carry some cost.

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