Business Studies, asked by bisht4898, 9 months ago

How can an importer who has to pay 10000 hedge the foreign risk?

Answers

Answered by ʙʀᴀɪɴʟʏᴡɪᴛᴄh
3

Answer:

Then, the importer would have to pay $110,000, or $10,000 more, for the imports. ... Hedging refers to the avoidance of a foreign exchange risk, or the covering of an open posi ‐tion

Answered by Anonymous
3

Answer:

Hedging is a way for a company to minimize or eliminate foreign exchange risk. Two common hedges are forward contracts and options. ... An option sets an exchange rate at which the company may choose to exchange currencies. If the current exchange rate is more favorable, then the company will not exercise this option.

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