A company can hedge their foreign-currency risk by using ________ financial contracts such as forward contracts and options.

Question

Quizplus · Accepted Answer

Derivative financial contracts such as forward contracts and options can be used to hedge foreign-currency risk. These contracts derive their value from an underlying asset or investment. Companies use derivative contracts to limit their exposure to fluctuations in foreign exchange rates.

A Company Can Hedge Their Foreign-Currency Risk by Using ________