Which of the Following Hedging Strategies Is Not Used to Minimize

question 102

Multiple Choice

Which of the following hedging strategies is not used to minimize transaction exposure?

• A) eurobond market
• B) forward exchange market
• C) money market
• D) currency futures market

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Definitions:

Shipment Contract

An agreement where the seller is obligated to transport goods to a specific destination, with title and risk of loss passing to the buyer upon delivery to a carrier.

Bill Of Lading

An official document issued by a carrier to acknowledge receipt of cargo for shipment, acting as a contract between the owner of the goods and the carrier.

Insurable Interest

Insurable interest exists when an individual or entity stands to suffer a financial loss or certain types of loss from the damage, loss, or destruction of the property or the life insured.

Document of Title

A legal document evidencing a person's legal right to control the disposal of goods, such as a bill of lading or warehouse receipt.