One of the Drawbacks of Using Forward Contracts to Hedge

question 26

Multiple Choice

One of the drawbacks of using forward contracts to hedge foreign-exchange risk is that the:

• A)Transaction costs in the forward market are high
• B)Forward rates are always lower than spot rates
• C)Hedged currency could appreciate during the period
• D)Hedged currency could depreciate during the period

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Definitions:

Humanistic Psychology

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Scientific Foundation

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Big Five Personality Factors

A model outlining five broad dimensions of human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

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