Agreements between firms and banks which permit the firm to either sell or buy a specific foreign currency at a future date at a known price are called hedges.

Name: Agreements between firms and banks which permit the firm to either sell or buy a specific foreign currency at a future date at a known price are called hedges.
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These agreements are typically referred to as "forward contracts" or "futures contracts," not hedges, although they are used for hedging purposes.

Agreements Between Firms and Banks Which Permit the Firm to Either