Which of a) through d) is a reasonable guideline for currency risk management?
A) All noncash currency risk exposures should be hedged with currency derivatives.
B) Do not hedge unless the purpose is to reduce translation exposure to currency risk.
C) Treasury should hold the managers of individual operating units responsible for the consequences of unexpected changes in currency values.
D) Treasury should quote market prices for currency hedges to the individual units.
E) None of the above

Question

Quizplus · Accepted Answer

D is a reasonable guideline because it encourages transparency and accountability in managing currency risk by ensuring that individual units are aware of the costs associated with hedging. This can lead to more informed decision-making at the unit level.

Which of A) Through D) Is a Reasonable Guideline for Currency