Zu dieser Karteikarte gibt es einen kompletten Satz an Karteikarten. Kostenlos!
110
A company due to pay a certain amount of a foreign currency in the future decides to hedge with futures contracts. Which of the following best describes the advantage of hedging?
A.It leads to a better exchange rate being paid
B.It leads to a more predictable exchange rate being paid
C.It caps the exchange rate that will be paid
D.It provides a floor for the exchange rate that will be paid
A.It leads to a better exchange rate being paid
B.It leads to a more predictable exchange rate being paid
C.It caps the exchange rate that will be paid
D.It provides a floor for the exchange rate that will be paid
Answer: B
Hedging is designed to reduce risk not increase expected profit. Options can be used to create a cap or floor on the price. Futures attempt to lock in the price
Hedging is designed to reduce risk not increase expected profit. Options can be used to create a cap or floor on the price. Futures attempt to lock in the price
Karteninfo:
Autor: CoboCards-User
Oberthema: Finance & Investment
Thema: Derivatives
Veröffentlicht: 27.10.2015