The practice of insuring against potential losses that result from adverse changes in exchange rates is called currency ________.

Question

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Currency hedging is the process of protecting against potential losses that may result from fluctuations in currency exchange rates. This is achieved by using financial instruments like forward contracts, options, and futures to offset the risk of adverse price movements. Arbitrage involves taking advantage of price differences between two or more markets, while speculation entails taking a calculated risk to profit from potential price movements. Conversion refers to the exchange of one currency for another.

The Practice of Insuring Against Potential Losses That Result from Adverse