true or false Q

26. One function of the foreign exchange market is to provide some insurance against the risks that arise from volatile changes in exchange rates, commonly referred to as foreign exchange risk. Although the foreign exchange market offers some insurance against foreign exchange risk, it cannot provide complete insurance.

27. New trade theory stresses that in some cases countries specialize in the production and export of particular products not because of underlying differences in factor endowments, but because in certain industries the world market can support only a limited number of firms

28. As rival global firms follow each other across countries, they bring with them their brand names, products, and marketing strategies from other national markets, thus creating homogeneity across markets

29. Outsourcing production to foreign countries increases the chance for companies to gain significant orders for their products from those countries

30. Your company is going to have a loss of $50,000 if your company converts $500,000 into euros when the exchange rate is $1 = 0.85. After three months, the company converts this back into dollars when the exchange rate is $1 = 1