The Hedging Strategy That Offsets Foreign Assets with Foreign Liabilities

question 7

Multiple Choice

The hedging strategy that offsets foreign assets with foreign liabilities is known as ________ hedge.

• A) an income-statement
• B) balance-sheet
• C) decentralized debt
• D) decentralized equity

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Definitions:

Cross-Border Trade

International trade involving the exchange of goods, services, and capital across national borders.

Cross-Border Trade

The exchange of goods or services between individuals, companies, or governments from different countries.

Mexican Business Environment

The economic, cultural, and regulatory context within which businesses operate in Mexico.

Common Currency

A system where a single form of money is used across multiple countries, facilitating easier trade and financial transactions.