In Foreign Currency Trading, 'Hedging' Means

Multiple Choice

In foreign currency trading, 'hedging' means:

A) eliminating currency risk by fixing an exchange rate in advance.
B) locking in a risk- free profit when the same currency is priced differently in two different markets by simultaneously buying in one market and selling in the other.
C) entering a contract to exchange currencies at an agreed future date in which the rate is not specified.
D) holding an open position in the hope of gaining from favourable currency movements.