Currency futures do not provide a good vehicle for hedging:
A) Long-dated foreign exchange exposure.
B) Currency exposure in the British pound.
C) Short-term currency exposure.
D) Anticipated currency exposure.
E) None of the above.

Question

Quizplus · Accepted Answer

Currency futures are typically standardized contracts with set amounts and dates, making them less flexible for long-dated foreign exchange exposure, which may require customization to match the specific timing and amount of the exposure.

Currency Futures Do Not Provide a Good Vehicle for Hedging