Companies may use future contracts to hedge against losses in foreign currencies.

Name: Companies may use future contracts to hedge against losses in foreign currencies.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Companies can use future contracts as a form of risk management strategy to mitigate potential losses from fluctuations in foreign currency exchange rates. This allows them to lock in a certain exchange rate for a future date, reducing uncertainty and providing a level of protection against adverse movements in currency values.

Companies May Use Future Contracts to Hedge Against Losses in Foreign