Cross-Hedging May Involve Taking a Forward Position in a Currency

question 29

True/False

Cross-hedging may involve taking a forward position in a currency that is highly correlated with the currency an MNC needs to hedge.

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Definitions:

State Power

The capacity of a state to regulate within its territory, enforce laws, execute decisions, and maintain order and sovereignty.

Privatization

The act of moving control and ownership of a corporation, institution, agency, or governmental service from public authorities to private sector entities.

Military Functions

The roles and responsibilities of the armed forces, including defense, deterrence, and support in national emergencies.

For-profit Corporations

Businesses that operate with the primary goal of earning profit for their owners or shareholders.