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A system of managed floating exchange rates is A. a system in which governments use flexible exchange rates. B. a system in which governments are forbidden from attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed. C. a system in which governments use extensive fiscal policy to discourage exchange rate movements. D. a system in which governments need to reach a prior agreement among them before they may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed. E. a system in which governments may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed.

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Answer:

E. a system in which governments may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed.

Explanation:

Foreign exchange market can be defined as type of market in which the currency of one country is converted into that of another country.

For example, the conversion of dollars of the United States of America can be converted into naira (Nigeria) at the foreign exchange market.

Efficient market school is the market school which argues that forward exchange rates do the best possible job for forecasting future spot exchange rates, so investing in exchange rate forecasting services would be a waste of time because it is impossible to have a consistent alpha generation on a risk adjusted excess returns basis as market prices are only affected by new informations.

The efficient market school also known as the efficient market hypothesis (EMH) is a hypothesis that states that asset (share) prices reflect all information and it is very much impossible to consistently beat the market.

Also, forward exchange rates are exchange rates controlling foreign exchange transactions at a specific future date or time.

A system of managed floating exchange rates is a system in which governments may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed. It is also referred to as managed float regime and it avails the central bank of a particular country to regularly intervene in the foreign exchange market so as to positively change the direction of the currency's float while significantly shoring up its balance of payments with respect to volatility.

Answer:

E. a system in which governments may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed.

Explanation:

A system of managed floating exchange rates is a system in which governments may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed.

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