From the perspective of a corporate CFO,when hedging a payable versus a receivable
A)credit risk considerations are more germane for a payable.
B)credit risk considerations are more germane for a receivable.
C)none of the options

Question

Quizplus · Accepted Answer

When hedging a payable, the primary risk is currency risk, but when hedging a receivable, there is also the risk of credit risk from the counterparty not paying. Therefore, credit risk considerations are more relevant for a receivable.

From the Perspective of a Corporate CFO,when Hedging a Payable