The Basic Hedging Strategy Involves

question 36

Multiple Choice

The basic hedging strategy involves

• A) reducing hard currency assets and soft currency liabilities
• B) increasing hard currency liabilities and soft currency assets
• C) reducing soft currency assets and hard currency liabilities
• D) converting soft currencies to hard currencies and lending hard currencies

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Definitions:

Open Account

A credit arrangement where goods or services are provided to a customer with the understanding that the customer will pay the supplier at a later date.

Note Written

A formally documented obligation in which one party promises to pay another party a predetermined sum of money at a specified date.

Interest-Bearing Note

A debt instrument that pays interest at a predetermined rate to the holder, typically issued in exchange for a loan or credit extended to the borrower.

Maturity Value

The amount that is due at the maturity or due date of a note.