Which of the Following Is the Least Effective Way of Hedging

question 73

Multiple Choice

Which of the following is the least effective way of hedging exposure in the long run?

• A) long-term forward contract.
• B) currency swap.
• C) parallel loan.
• D) money market hedge.

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Definitions:

Due Diligence

The comprehensive investigation or exercise of care that a reasonable business or person is expected to take before entering into an agreement or transaction with another party.

Supply Chains

A network of individuals, organizations, resources, activities, and technology involved in the creation and sale of a product, from the delivery of raw materials from the supplier to the manufacturer, and ultimately to the end user.

Competent Parties

Individuals or entities that are legally able to enter into a binding contract, having the necessary legal authority and mental capacity.

Legal Subject Matter

The specific theme, topic, or focus of a legal document or discussion, often defining the scope of legal rights and duties.