Which of the Following Hedging Strategies Would a Business Most

question 43

Multiple Choice

Which of the following hedging strategies would a business most likely use?

• A)An importer will want to hedge his foreign denominated accounts receivable and will purchase forward contracts to hedge an exposed net asset position.
• B)An importer will want to hedge his foreign denominated accounts payable and will purchase forward contracts to hedge an exposed net liability position.
• C)An exporter will want to hedge his foreign denominated accounts receivable and will purchase forward contracts to hedge an exposed net liability position.
• D)An exporter will want to hedge his foreign denominated accounts payable and will purchase forward contracts to hedge an exposed net liability position.

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Definitions:

Scientific Explanation

A rationale based on evidence and reasoning to explain natural phenomena or experimental results.

Scientific Method

A systematic process for carrying out research and experimentation, involving observation, hypothesis formulation, experimentation, and conclusion.

Taxonomy

Naming and classifying species in a systematic way.