Hedging involves taking positions in derivative instruments that are ___________ a firm's currency position.
A)the same as
B)equal to
C)opposite to
D)not related to

Question

Quizplus · Accepted Answer

Hedging involves taking positions in opposite direction to a firm's currency position, in order to mitigate the risk of adverse movements in exchange rates. This allows the firm to lock in a known exchange rate and reduce the uncertainty and potential losses from currency volatility.

Hedging Involves Taking Positions in Derivative Instruments That Are ___________