Engaging in activities that avoid or minimise possible adverse financial effects arising from exchange rate movements is known as:
A)consolidation
B)speculating
C)insurance
D)hedging

Question

Quizplus · Accepted Answer

Hedging involves taking steps to avoid or minimize possible adverse financial effects arising from exchange rate movements. This can be achieved through techniques such as forward contracts, options, or currency swaps. Consolidation refers to combining financial statements of multiple entities to create a single set of financial statements. Speculating involves taking risks in order to achieve financial gain, and insurance refers to protecting against losses from unforeseen events.

Engaging in Activities That Avoid or Minimise Possible Adverse Financial