Currency Hedging Is ________

question 21

Multiple Choice

Currency hedging is ________.

• A) the practice of insuring against potential losses that result from adverse changes in exchange rates
• B) the profit-motivated purchase and sale of interest-paying securities denominated in different currencies
• C) the purchase or sale of a currency with the expectation that its value will change and generate a profit
• D) the instantaneous purchase and sale of a currency in different markets for profit

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Definitions:

Issued

Refers to securities that have been distributed to investors, typically shares of stock or bonds that the company has sold to the public.

Face Amount

The nominal value of a security stated by the issuer, which is the amount to be repaid at maturity.

Sold

Refers to the completion of a transaction where goods or services are exchanged for payment.

Issuance

The process of offering new securities, such as stocks or bonds, to the public for the first time.