Contingent exposure can best be hedged with
A)options.
B)money market hedging.
C)futures.
D)all of the above

Question

Quizplus · Accepted Answer

Options allow a company to limit their losses in the event of an adverse change in exchange rates, while still allowing them to benefit from favorable changes. This is particularly useful for contingent exposure, which involves uncertain future transactions. Money market hedging and futures contracts do not provide the same flexibility and may be less effective in managing the risks associated with contingent exposure.

Contingent Exposure Can Best Be Hedged with