Hedging with currency options involves a commitment by a firm to buy currency at a fixed rate.

Name: Hedging with currency options involves a commitment by a firm to buy currency at a fixed rate.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Hedging with currency options involves purchasing the right, but not the obligation, to buy or sell a currency at a predetermined exchange rate. It does not require a firm to commit to buying currency at a fixed rate.

Hedging with Currency Options Involves a Commitment by a Firm