__________ involves offsetting exposures in one currency with exposures in the same or another currency, where exchange rates are expected to move in such a way that losses on the first exposed position should be offset by gains on the second currency exposure and vice versa.
A) forward contract
B) exposure netting
C) money-market hedge
D) currency option

Question

Quizplus · Accepted Answer

Exposure netting involves offsetting exposures in one currency with exposures in the same or another currency, where exchange rates are expected to move in such a way that losses on the first exposed position should be offset by gains on the second currency exposure and vice versa.Forward contract, currency option, and money-market hedge do not necessarily involve offsetting currency exposures in the same or another currency.

__________ Involves Offsetting Exposures in One Currency with Exposures in the Same