An exporter who is to receive payment in foreign currency in three months and who wants to engage in "hedging" would __________ the foreign currency on the three-Months forward market in order to protect himself/herself from __________ of the Foreign currency.

Question

Quizplus · Accepted Answer

Hedging against the risk of depreciation involves selling the foreign currency forward, locking in a price now to protect against a decrease in the currency's value.

An Exporter Who Is to Receive Payment in Foreign Currency