A __________ Involves Offsetting Exposures in One Currency with Exposures

question 35

Multiple Choice

A __________ involves offsetting exposures in one currency with exposures in the same or another currency, where exchange rates are expected to move in such a way that losses on the first exposed position should be offset by gains on the second currency exposure and vice versa.

• A) forward contract
• B) currency collar
• C) money-market hedge
• D) currency option