________________ Refers to the Covering of an Open Position by Eliminating

question 31

Multiple Choice

________________ refers to the covering of an open position by eliminating some level of risk.

• A)Arbitrage
• B)Hedging
• C)Foreign exchange risk
• D)Speculation

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Definitions:

Exchange Rate

The worth of one currency compared to another, establishing the amount of one currency equivalent in another currency for conversion purposes.

U.S. Dollars

The official currency of the United States, used as a standard monetary unit in international finance.

Danish Krone

The official currency of Denmark, Faroe Islands, and Greenland.

U.S. Dollars

The legal tender of the United States, denoted by the symbol $.