Financial market hedges work best for _______ exposures to currency risk.

Question

Quizplus · Accepted Answer

Financial market hedges work best for transaction exposures, which refer to the risk of currency fluctuations affecting the value of a future transaction. This includes imports, exports, loans or any other transaction denominated in a foreign currency that is expected to occur in the future. Accounting, economic, operating, and translation exposures are different types of currency risk that may require different hedging strategies.

Financial Market Hedges Work Best for _______ Exposures to Currency