An Example of an Operational Hedging Strategy Against Foreign Exchange

question 38

Multiple Choice

An example of an operational hedging strategy against foreign exchange risk is ________.

• A) using a forward contract to establish a fixed exchange rate for future transactions
• B) using local debt to balance local assets
• C) using a foreign currency option to ensure access to foreign currency at a fixed exchange rate for a specific period of time
• D) not using leads and lags for intercompany payments

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Definitions:

Species-Specific Predispositions

Innate behavioral tendencies or characteristics that are unique to particular species, influencing their ability to learn or react in specific ways.

Concurrent Schedules

In operant conditioning, it refers to two or more reinforcement schedules that operate simultaneously for two or more behaviors.

Observational Learning

A learning process whereby individuals acquire new behaviors or information by watching and imitating others.

Cognitions

Cognitions refer to the mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, judging, and problem-solving.