Multiple Choice
Which one of the following is NOT a reason for using hedges such as a synthetic forward?
A) In some currency markets, forward contracts may not be available, but they can be manufactured using a money market hedge.
B) Individual companies are not able to borrow and lend at the interest rates available in the interbank market.
C) When time horizons are long, forward contracts can be expensive as the bid-ask spread widens substantially.
D) It may be unfavorable to consider borrowing and lending to hedge one's currency risk.
Correct Answer:

Verified
Correct Answer:
Verified
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