One strategy a company can follow to protect itself from currency fluctuations is use of
A) a letter of credit.
B) risk retention.
C) forward market hedges.
D) All of the above
E) None of the above

Question

Quizplus · Accepted Answer

A letter of credit is not relevant,and risk retention is the opposite of protecting oneself from currency fluctuations.Forward market hedges can protect a company from currency fluctuations by selling forward a future receivable in a foreign currency,or purchasing forward the currency necessary to cover a foreign payable.

One Strategy a Company Can Follow to Protect Itself from Currency