Generally speaking,
A)it is not possible to hedge both translation exposure and transaction exposure simultaneously.
B)if a firm can hedge translation exposure then transaction exposure will be simultaneously hedged.
C)if a firm can hedge transaction exposure then translation exposure will be simultaneously hedged.
D)none of the above

Question

Quizplus · Accepted Answer

Translation exposure and transaction exposure are two different types of foreign exchange risk. A firm can hedge one type of exposure without hedging the other.

Generally Speaking