A Firm Wants to Hedge a Potential Transaction but Is

question 98

Multiple Choice

A firm wants to hedge a potential transaction but is also concerned about the possibility that it may not take place.In this case it is better to hedge potential risks using:

• A)options.
• B)forwards.
• C)futures.
• D)a cash-and-carry strategy.
• E)the spot exchange rate.

---

Definitions:

Being Single

A state of not being in a marriage or a romantic relationship, focusing on individual autonomy and self-reliance.

Stigmatized

Labeled or regarded as worthy of disgrace or disapproval.

Maternity

The period during pregnancy and shortly after childbirth.

Child Support

Financial contributions legally required to be made by a non-custodial parent, aimed at supporting the wellbeing and expenses of their children.