To Protect Against Loss as a Result of Adverse Currency

question 51

Multiple Choice

To protect against loss as a result of adverse currency fluctuations, an export firm may:

• A)demand cash settlement
• B)purchase use a futures contract as a hedge
• C)require the customer to make payment in the exporter's currency
• D)require a government guarantee against currency loss of valueall of the above are possible protections.

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Definitions:

Venture Capitalist

An investor who provides capital to startup companies and small businesses with perceived long-term growth potential in exchange for equity.

Leverage Advisor

A financial advisor specialized in guiding clients on how to use borrowed funds or leverage to potentially increase investment returns.

Risk-Return Trader

An investor who analyzes the potential return of an investment relative to its risk, aiming to maximize returns while minimizing risks.

Hedge Fund Consultant

A professional advisor who provides expertise and guidance on hedge fund strategies, investments, and operations.