Multiple Choice
A company due to pay a certain amount of a foreign currency in the future decides to hedge with futures contracts.Which of the following best describes the advantage of hedging?
A) It leads to a better exchange rate being paid
B) It leads to a more predictable exchange rate being paid
C) It caps the exchange rate that will be paid
D) It provides a floor for the exchange rate that will be paid
Correct Answer:
Verified
Correct Answer:
Verified
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