Do Financial Institutions Need to Consider Foreign Exchange Market Conditions When Making Domestic Security Market Decisions?
Point No. If there is no exchange of currencies, there is no need to monitor the foreign exchange market.
Counter-Point Yes. Foreign exchange market conditions can affect an economy or an industry and therefore affect the valuation of securities. In addition, the valuation of a firm can be affected by currency movements because of its international business.
Who Is Correct? Articulate both positions. Additionally, form a conclusion characterizing your opinion about the issue.