_______________________is used to hedge exchange rate risk over a long period of time whereby one party agrees to trade periodic payments in a given currency with another party who agrees to do the same in a different currency.

Question

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A currency swap is used to hedge exchange rate risk over a long period of time whereby one party agrees to trade periodic payments in a given currency with another party who agrees to do the same in a different currency. A put option and a call option are types of financial derivatives used to hedge risk, but they are not used for long-term hedging of exchange rate risk. A futures agreement is a contract to buy or sell an asset at a specific price and time in the future, and may be used to hedge risk, but it is not specifically designed for currency risk hedging over a long period of time.

_______________________Is Used to Hedge Exchange Rate Risk Over a Long