Over-hedging means to hedge a ______ amount in a currency than the actual transaction amount and it can _____ affect a firm.
A) larger; favourably
B) smaller; favourably
C) smaller; adversely
D) larger; adversely

Question

Quizplus · Accepted Answer

Over-hedging involves hedging a larger amount than the actual transaction, which can lead to adverse effects such as unnecessary costs or losses if the currency moves unfavorably.

Over-Hedging Means to Hedge a ______ Amount in a Currency