Hedging strategies are techniques used to offset or protect against risk and include borrowing or lending in different currencies.

Question

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Hedging strategies are designed to minimize or eliminate the risk of adverse price movements in an asset, commodity, or currency. Borrowing or lending in different currencies is one of many hedging strategies used by investors and businesses to manage their exposure to exchange rate fluctuations. Other common hedging strategies include options, futures, swaps, and forward contracts.

Hedging Strategies Are Techniques Used to Offset or Protect Against