Which of the Following Statements Correctly Defines Hedging

question 77

Multiple Choice

Which of the following statements correctly defines hedging?

• A) Hedging is the transfer of a risky asset for a non-risky asset to protect against uncertainty.
• B) Hedging is the profit earned by an exporter due to a fall in the exchange rate.
• C) Hedging is the profit earned by accurately forecasting the value of an exchange rate.
• D) Hedging is the loss made by an importer due to a fall in the currency value.

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