9 Views

Question : Which of the following is an example of an exchange rate risk mitigation strategy?

Option 1: Currency hedging
 

Option 2: Currency pegging
 

Option 3: Currency speculation

 

Option 4: Currency manipulation


Team Careers360 14th Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: Currency hedging
 


Solution : The correct answer is a) Currency hedging

Currency hedging is an example of an exchange rate risk mitigation strategy. It involves taking actions to minimize or offset the potential negative impact of exchange rate fluctuations on financial transactions or investments. Currency hedging strategies can include the use of financial instruments such as forward contracts, futures contracts, options, or currency swaps. These instruments allow individuals or businesses to lock in a specific exchange rate for future transactions, reducing the uncertainty and risk associated with currency fluctuations.

 

Related Questions

Amity University, Noida Law A...
Apply
700+ Campus placements at top national and global law firms, corporates and judiciaries
Amity University Noida B.Tech...
Apply
Among Top 30 National Universities for Engineering (NIRF 2024) | 30+ Specializations | AI Powered Learning & State-of-the-Art Facilities
Amity University Noida MBA Ad...
Apply
Amongst top 3% universities globally (QS Rankings) | Ranked among top 10 B-Schools in India by multiple publications
Amity University, Noida BBA A...
Apply
Ranked amongst top 3% universities globally (QS Rankings)
MAHE Online MBA
Apply
Apply for Online MBA from Manipal Academy of Higher Education (MAHE)
FLAME University | MBA 2026
Apply
NAAC A++ Grade | MBA program graded A** (National) by CRISIL | AACSB, ACBSP and BGA Member
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books