Question

Which two statements describe domestic stocks? They are directly affected by exchange rate fluctuations. They are always traded in local currency. They are likely to be unfamiliar to investors. They are based in the investor’s country of residence. They form an important part of foreign trade.

Answer 1

They are based in the investor’s country of residence

They are always traded in local currency.

Explanation:

Stocks, in general, indicate ownership shares of a company and domestic stocks as the name suggests are stocks that are based in the investor's home country.

These domestic stocks are almost always traded in local currency and they are a great help to local investors because it eliminates the currency risk because of exchange rates which can change at any time.

Answer 2

They are based in the investor’s country of residence

They are always traded in local currency.

Explanation:

Stocks, in general, indicate ownership shares of a company and domestic stocks as the name suggests are stocks that are based in the investor's home country.

These domestic stocks are almost always traded in local currency and they are a great help to local investors because it eliminates the currency risk because of exchange rates which can change at any time.