Which of the Following Is NOT True of Currency Hedging

question 149

Multiple Choice

Which of the following is NOT true of currency hedging?

• A) It is the practice of insuring against potential losses that result from adverse changes in exchange rates.
• B) Companies use it to lessen the risk associated with international transfers of funds.
• C) Companies use it to protect themselves in credit transactions where there is a time lag between billing and receipt of payment.
• D) It is the instantaneous purchase and sale of a currency in different markets for profit.