It is generally least difficult to effectively hedge various types of:

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Transaction exposure refers to the risk of fluctuation in exchange rates between the time a transaction is agreed upon and the time it is settled. This type of exposure is the most straightforward to hedge because it involves a specific monetary amount and a specific timeframe. Hedging techniques such as forward contracts, futures contracts, and options can be easily used to manage transaction exposure. In contrast, translation exposure and economic exposure can be more challenging to hedge as they involve a more complex set of variables and risks.

It Is Generally Least Difficult to Effectively Hedge Various Types