A __________ Involves Offsetting Exposures in One Currency with Exposures

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