[Answer] Which of the following options is the best way for investors to manage currency risk?

Answer: By locking in forward rates for known foreign payments.
Which of the following options is the best way for investors to manage currency risk?

Foreign exchange risk (also known as FX risk exchange rate risk or currency risk ) is a financial risk that exists when a financial transaction is denominated in a currency other than the domestic currency of the company. The exchange risk arises when there is a risk of an unfavourable change in exchange rate between the domestic currency and the denominated currency before the date when the …

Hedge. A hedge is a type of derivative or a financial instrument that derives its value from an underlying asset.Hedging is a way for a company to minimize or eliminate foreign exchange risk . Two common hedges are forward contracts and options .. A forward contract will lock in an exchange rate today at which the currency transaction will occur at the future date.

Equity risk – Wikipedia

Foreign exchange risk – Wikipedia

Equity risk – Wikipedia

Equity risk – Wikipedia

The terms o…

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