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An Example of an Operational Hedging Strategy Against Foreign Exchange

Question 38

Multiple Choice

An example of an operational hedging strategy against foreign exchange risk is ________.


A) using a forward contract to establish a fixed exchange rate for future transactions
B) using local debt to balance local assets
C) using a foreign currency option to ensure access to foreign currency at a fixed exchange rate for a specific period of time
D) not using leads and lags for intercompany payments

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