It is generally least difficult to effectively hedge various types of:

Question

Quizplus · Accepted Answer

Transaction exposure refers to the risk that arises from fluctuations in exchange rates between the time a company enters into a transaction and the time it settles the transaction. This type of exposure can be effectively hedged through various methods such as forward contracts, option contracts, and currency swaps. On the other hand, translation exposure and economic exposure are more difficult to hedge as they involve broader risks such as changes in exchange rates affecting the values of a company's assets, liabilities, and earnings over time.

It Is Generally Least Difficult to Effectively Hedge Various Types