n NISM Certifications
X NISM Series X
Medium

What is the primary benefit for an importer in the foreign exchange market?

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Reduce import costs through speculation

  2. Hedge against currency risk

    Correct answer

  3. C

    Exploit arbitrage opportunities

  4. D

    All of the above

Why this is the answer

The main benefit is risk mitigation; traders hedge currency fluctuations to stabilize import costs.

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