When Referring to Foreign-Currency Transactions, Hedging Is a Process in Which

question 6

Multiple Choice

When referring to foreign-currency transactions, hedging is a process in which:

• A) companies wager that the currency of one country will rise relative to their own
• B) a company wagers that the currency of one country will fall relative to its own
• C) a company protects itself from losing money in one transaction by engaging in a counterbalancing transaction
• D) companies sell the same product in various countries at similar prices to minimize the currency risks associated with any one particular country

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