Which of the Following Statements Regarding Hedging with Currency Forwards

question 29

Multiple Choice

Which of the following statements regarding hedging with currency forwards is true?

• A)Currency forwards can be used to eliminate the volatility of earnings from foreign operations.
• B)Currency forward contracts serve to reduce the cash flow volatility associated with a project.
• C)If possible, it is to a firm's benefit to hedge their exchange rate risk exposure completely.
• D)Both A and B are true statements.

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Definitions:

Free Blacks

is a term for African Americans who were not enslaved, living in the United States either before the Civil War in both the North and South or in areas of the South where slavery was less prevalent.

Legally Free

A status wherein an individual or entity is not under any legal bondage or constraint, enjoying full legal rights and freedoms.

Brutal Owners

Individuals who exercise harsh and cruel control over others, particularly in contexts like slavery or abusive employment practices.

Slave Church

A religious gathering or place of worship created or used by enslaved African Americans, especially during the period of American slavery.