_____ allow firms to exchange currencies at a previously agreed exchange rate as a way to hedge exchange rate movements.

Question

Quizplus · Accepted Answer

Currency swaps allow firms to exchange currencies at a previously agreed exchange rate, providing a way to hedge against exchange rate movements. Call and put options are financial instruments that provide the right, but not the obligation, to buy or sell currencies at a certain exchange rate. Premiums are the payment made for options. Marked-to-market refers to the practice of adjusting the value of assets or liabilities to reflect their current market values. Therefore, the best choice is D) Currency swaps.

_____ Allow Firms to Exchange Currencies at a Previously Agreed