Last week, Saturn Tide a U.S.-based energy firm, entered into an agreement with another party to exchange currency and execute the deal in eighteen months. What is Saturn Tide using to insure itself against foreign exchange risk?
A) currency speculation
B) carry trade
C) hedging
D) currency swap
E) arbitrage

Question

Quizplus · Accepted Answer

Saturn Tide is using hedging to protect itself against foreign exchange risk by entering into an agreement to exchange currency at a future date, thus locking in the exchange rate and minimizing potential losses due to currency fluctuations.

Last Week, Saturn Tide a U