An Example of Cross-Hedging Is

question 89

Multiple Choice

An example of cross-hedging is:

• A) find two currencies that are highly positively correlated; match the payables of the one currency to the receivables of the other currency.
• B) use the forward market to sell forward whatever currencies you will receive.
• C) use the forward market to buy forward whatever currencies you will receive.
• D) B and C

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Definitions:

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.