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Which of the Following Statements Correctly Defines Hedging

Question 47

Multiple Choice

Which of the following statements correctly defines hedging?


A) Hedging is the transfer of a risky asset for a non-risky asset to protect against uncertainty.
B) Hedging is the profit earned by an exporter due to a fall in the exchange rate.
C) Hedging is the profit earned by accurately forecasting the value of an exchange rate.
D) Hedging is the loss made by an importer due to a fall in the currency value.

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