Daewoo of Korea had,in late 2007 and early 2008,entered into a series of ________.
A)forward exchange contracts
B)bank drafts
C)cash pools
D)drafts
E)hedges

Question

Quizplus · Accepted Answer

Forward exchange contracts are a common hedging tool used to manage foreign currency risk. As Daewoo is based in Korea and likely has many international transactions in different currencies, it makes sense that they would enter into forward exchange contracts to manage their exposure to currency fluctuations. Bank drafts and drafts are payment methods, not hedging tools, and cash pools are a type of cash management strategy, but not necessarily related to currency risk management.

Daewoo of Korea Had,in Late 2007 and Early 2008,entered into a Series