The Real Cost of Hedging Payables with a Forward Contract

question 31

Multiple Choice

The real cost of hedging payables with a forward contract equals:

• A) the nominal cost of hedging minus the nominal cost of not hedging.
• B) the nominal cost of not hedging minus the nominal cost of hedging.
• C) the nominal cost of hedging divided by the nominal cost of not hedging.
• D) the nominal cost of not hedging divided by the nominal cost of hedging.

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Definitions:

Groups

Collections of two or more individuals who interact and identify with one another and are recognized by themselves or others as a distinct entity.

Defining Features

The essential attributes or characteristics that distinguish a subject or phenomenon from all others.

Collective Pursuit

The joint effort of a group or community working together towards a common objective or goal.

Diverse Ability Groups

Groups composed of individuals with varying abilities, skills, and talents, often aimed at promoting inclusivity and leveraging differences for enhanced group performance.