A 'hedging' financial instrument can:
A) protect against losses from adverse movements in foreign exchange rates
B) eliminate any possible gain from changes in the Australian dollar/US dollar exchange rate
C) offset the risk of loss from adverse commodity price changes
D) do all of the above

Question

Quizplus · Accepted Answer

Hedging financial instruments are designed to protect against losses from adverse movements in foreign exchange rates, eliminate any possible gain from changes in the Australian dollar/US dollar exchange rate, and offset the risk of loss from adverse commodity price changes. Therefore, option D is the correct answer.

A 'Hedging' Financial Instrument Can