Which of the following currency risks could only be hedged by a non deliverable forward (NDF)?
A) an exposure in Latvian Lats (LVL)
B) an exposure in Russian Rouble (RUB)
C) an exposure in Romanian Leu (RON)
D) an exposure in Bulgarian Lev (BGN)

Question

Quizplus · Accepted Answer

A non deliverable forward (NDF) is used to hedge against currency risks in currencies that are not freely tradable or convertible, such as the Russian ruble. The Latvian lats, Romanian leu, and Bulgarian lev are all freely convertible currencies and can be hedged using traditional forward contracts or other hedging instruments.

Which of the Following Currency Risks Could Only Be Hedged