To reduce foreign exchange risk from selling goods to a foreign country,futures contracts should be sold.

Question

Quizplus · Accepted Answer

Selling futures contracts can help companies lock in exchange rates and reduce the risk of exchange rate fluctuations when selling goods to a foreign country. By selling a futures contract, the company agrees to sell or buy a specific currency at a predetermined price on a future date, which provides certainty about the exchange rate and eliminates the risk of unfavorable currency movements.

To Reduce Foreign Exchange Risk from Selling Goods to a Foreign